Atalaya Mining Copper (LSE:ATYM) — 2022 Annual General Meeting

0:00 Good morning, and welcome to the ATALAYA Mining PLC twenty twenty two Annual General Meeting Proceedings. Throughout this recorded presentation, meeting attendees will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated in the right hand corner of your screen. Simply type in your questions and press send. The may not be in a position to answer every question received during meeting today. However, all questions be reviewed and with responses published on the Investor Meet company platform where appropriate to do so. I'd now like to hand you over to Roger Davey, nonexec chairman. Good morning, sir. Thank you. Ladies and gentlemen, welcome to the annual general meeting of the company. My name, as you've just heard, is Roger Davey, chairman of the company. And with your cons with the consent of the meeting, I will act as chairman with great pleasure and very proudly of the meeting. Let me introduce, first of all, the other directors around me. We have Alberto, who you you sadly can't see. I presume we can't see at the moment. We have Alberto, Hussein, Steve, Kate with us together together with us today.

0:58 Unfortunately, Jesus and Neil Briggs and Cesar could not be with us today. We accept their apologies for various reasons. They couldn't make it. And so to start the meeting, I'm prepared a praisy of the of the directors of the chairman's letter, but sadly, I'm afraid I'm gonna have to you'll have to bear with me because I have to read the the complete letter verbatim. It's a little bit dry, but it has to be done for legal reasons. So if I can start with that, please, it starts dear shareholder. 2,001 was another year dominated by the pan tooth by the COVID nineteen pandemic, with the company maintaining as its primary focus the continued safety protection and well-being, not only of our staff and contractors, but also the community and our suppliers. Despite these external challenges, the operational and financial health of the company was not overlooked, and the company continued to build on its 2020 operational track record, culminating in a record annual production for 2021 of just over 56,100 tons of contained copper.

2:01 The average processed plant feed grade of point four one copper and the process recovery of eight of 86% were consistent with reserve estimates and the budgeted figures. Cash costs and all in sustaining costs for 2021 of $2.18 per pound and $2.48 per pound respectively were below just below the lower end of the revised 2021 cost guidance, mainly due to the combination of the US dollar strengthening against the euro and higher copper tonnes produced. With process plant optimization initiatives expected to support the copper production, output output guidance has been set at 54 to 56,000 tons of contained copper for 2022. The executive team was able to capitalize not only on the continued high level of operational performance, but also the higher copper price scenario during 2021, with revenue increasing to €405,700,000 from 253,800,000 in 2020, and EBITDA for 2021 of a €199,100,000 compared with 67,000,000 in 2020.

3:12 The resulting free cash flow generated enabled the company to reward it's a good word, reward investors with an inaugural dividend payout of €47,300,000, equivalent to 39.5¢ per dollar cents per share, which we paid out in December. Despite the previously announced payments of the deferred consideration to Astor, the company finished the year with net cash of 60,100,000 and in a robust position based obviously on consensus copper pricing to maintain a future meaningful and sustainable dividend policy of 30 to 50% of free cash flow. The completion and implementation of the flotation circuit improvements and the installation of additional tailings thickening capacity to reduce fresh water consumption with constant reduction in lime consumption.

4:00 These are both both highly cost effect cost incentivized, have combined to reduce overall power consumption and the carbon footprint during 2021. As well as being economically advantageous, the completion of the permitting and integration of a planned 50 megawatt solar plant on-site will be a significant factor and a major contributor to the attainment of corporate sustainability objectives. And you will note, of course, that during this last year, we also published our first sustainability report. Mine site exploration and infill drilling continued the successful replacement of minable reserves and maintenance of the mine life despite the increased rate of mining depletion. On top of the existing reserves, for additional growth prospects, the company is currently focusing on four main projects.

4:50 In the North Of Spain at Poreto Tauro, the company is engaging with local and regional stakeholders whilst progressing, of course, with internationally recognized best practice, preparing the preparation and submission of the environmental impact evaluation for the revised project. In the South at projecto Massive Alverde, exploration work is ongoing with encouraging dual results. And at projecto Rio Tinto East, an electromagnetic airborne geophysical survey was started at the end of two thousand twenty one, has now that has now been completed with several anomalies having been identified by the survey for follow-up exploration drilling. In December, the company announced the acquisition of a 51% interest in nickel, establishing a presence in the Osa Morena metallurgy metallogenic belt in the Southwest Of Spain, an area that includes the Alconcel gold copper copper gold project.

5:46 In January this year, the com the company announced the start of construction of of an an industrial scale helix plant at Projectorio Tinto. This plant will utilize the helix system and which is an extraction process developed, patented, and owned by Lane Technologies Limited to to produce produce copper and zinc metals from sulfide concentrates. LX has the potential to unlock significant value from the company's portfolio of polymetallic resources in the Rio Tinto district by materially increasing recoveries of copper, zinc, lead, and precious metals from the complex sulfide ores. The plant will have the capacity to produce up to 10,000 tonnes of metal annually, which dependent on the copper zinc mix, thus reducing transportation costs, treatment charges, and penalties associated with producing and delivering conventional concentrates.

6:37 I would like to take this opportunity to express our appreciation for the continued dedication and commitment of the management and staff have been responsible for the delivery of such excellent results in this difficult year. At the same time, I'd like to thank not only the board members for their continued support, guidance, and close involvement with the company's activities, but also our valued shareholders for their continued and appreciate appreciated support. Doctor Jose Sierra Lopez retired from the board during the year. In addition, mister Damon Barber stepped down in April 2021. On behalf of the board, I'd like to take this opportunity to thank both for their efforts and assistance over many years with the company and wish doctor Jose Sierra well in his retirement. At the same time, it is my pleasure to welcome Neil Gregson to the board. To date, 2022 is seeing considerable inflationary pressures with increased volatility in both costs and commodity markets as a result of the recent geopolitical events in Ukraine.

7:32 Nevertheless, commodity prices remain strong and strengthened by the experience and improvements achieved over these last two difficult years. Look forward with confidence to ongoing investment in our portfolio of projects to continue the growth path and increase the value of your company. That's the official letter. If I can just add to that slightly post post script is is that that during the year recently, should I say, XGC sold out their shareholding, and their representative, Harry Yu, left the board of directors. And to add to that, Kate Harcourt, a well recognized ESG specialist, has joined our board. But that is not in the official script. So I've added that to added to it. Thank you very much. The meeting now will now then come to order. With and with your consent, I shall ask George, which is always the most difficult part of the meeting, company secretary, to act as secretary in scrutiny of the meeting.

8:30 Not hearing any objections, the following documents have been tabled. The circular containing the notice of meeting, the form of proxy, the annual report containing the audited consolidated financial statements for the year ending 12/31/2021. Documents are available for any shareholder to examine if they so wish. The annual general meeting of the company was convened by notice to shareholders dated 05/26/2022. May I take the notice as read? Not seeing any objections. Quorum, I advise that there is a quorum present and that notice called in this meeting has been given in accordance with the company's articles of association. I now declare, therefore, that the meeting is properly called and constituted for the transaction of business.

9:17 I'd now like to turn to the resolutions put before the meeting and propose each resolution in turn to the meeting with its proxy votes already received.

9:28 Resolution number one provides for the receipt and consideration of the audited consolidated financial statements of the company for the year ending 12/31/2021 and the report of the directors and auditors there thereon. In respect of resolution one, the proxy votes have been cast as follows. Four, ninety three million two hundred ninety two thousand three hundred sixty two, which is essentially 100. Against 413, withheld 79,000. Proposal is resolution one as an ordinary resolution. Those in favor, please. Raise your hands. Thank you. Thank you. I declare the resolution carried. Rerelection of mister Roger Davy. The order resolution number two provides for the reelection of mister Roger Davy as director of the company. In In respect of resolution two, the proxy votes have been cast as follows.

10:14 Eight four 80,704,661, which is 92.9% against 6,156,000, withheld 6.51 6,511,000, and abstained 501. Now can I ask a shareholder, please, to propose the resolution number two as Thank you very much? Thank you. Those in favor? Well, those against, I declare the resolution carried. Resolution three provides for the reelection of mister as the director of the company. In respect of resolution three, the proxy votes have been cast as follows. 93,329,693, which is essentially 100%.

11:01 Against were 42,537, none withheld, and 501 abstain. And now propose resolution number three as an ordinary resolution. Those in favor? Thank you. Those against? Thank you. I declare the resolution carried. Rerelection of mister Jesus Fernandez Lopez. He is numb is resolution number four as a director of the company. In respect of resolution four, the proxy votes have been cast as follows. 93,000,000 four. Sorry. 93,329,693, essentially 100%, against 42,537. No no votes were held and 501 abstain. I now propose resolution number four as an ordinary resolution. Those in favor, please? Thank you.

11:50 And those against? No. I declare the resolution carried. Ordinary resolution number five provides for the reelection of doctor Hussein Barmah as director of the company. In respect to resolution five, the proxy votes have been cast as follows. For 88,053,998, which is 94.3%. Against is 5,318,232. Withheld nil and abstain 501. And now propose resolution number five as an ordinary resolution. Those in favor, please. Thank you. Those again. Thank you very much. I declare the resolution carried. Rerelection of mister Neil Gregson. Resolution number six provides for the reelection of mister Neil Gregson as the director of the company. In respect of resolution six, the proxy votes have been cast as follows. 94 is 93,371,817, essentially a 100% against 413, no withheld, and abstain 501.

12:51 I now propose resolution number six as an ordinary resolution. Those in favor, please. Thank you very much. And those against? No. Bill, thank you. I declare the resolution carried. Rerelection of mister Steven Victor Scott. The ordinary resolution number seven provides for the reelection of mister Steven Victor Scott as director of the company. And in respect of resolution seven, the proxy votes have been cast as follows. Four, 74,079,576, which is 86.8% against 11,305,653, withheld 7,987,001, abstained 501. And our proposed resolution number seven as an ordinary resolution. Those in favor, please. Thank you very much. Those against?

13:37 It's a nil. I declare the resolution carried. Order resolution number eight provides for the reelection of missus Kate Jane Harcourt as director of the company. Respect of resolution eight, the proxy votes have been cast as follows. $9,493,206,879, which is 99.8%, against 165,351, withheld nil and abstained 501. I now propose resolution number eight as an ordinary resolution. Those in favor, please? Thank you. Those against? No. Thank you very much. I declare the resolution carried. The ordinary resolution number nine provides for the reelection of Ernst and Young Cypress Limited as the auditors of the company. In respect to resolution nine, the proxy votes have been cast as follows. 93,000,000 four sorry. 93,372,318, essentially 100% against 413 withheld nil and abstained nil. I now propose resolution number nine as an ordinary resolution. Those in favor? Thank you. Those against?

14:45 Thank you. I declare the resolution carried. Resolution 10 authorizes the directors to grant pursuant to ATALAYA MINING PLC long term investment plan 2020 options to subscribe for up to 6,992,835 ordinary shares of 6 point seven point five percent pence each in the capital of the company, ordinary shares, therefore, representing approximately 5% of the company's issued share capital. At a minimum exercise price of the average of the mid market closing prices on AIM or the volume related average trading price on the Toronto Stock Exchange of an ordinary share where the majority of the ordinary shares are traded, on the five trading days immediately preceding the date of grant.

15:32 In respect of resolution 10, the proxy votes have been cast as follows. 4, 56,880,959, which is 65.5 percent floor, against 29,980,083, withheld 6,511,188, and abstained 501. And I propose to the meeting resolution resolution number 10 set out in the notice convening annual general meeting. As at least 50% of the company's issued share capital is represented at the meeting, in order for the resolution to be effective, it must be passed by a simple majority of the votes cast on the resolution. And I ask therefore those in favor. Thank you. And those against? Thank you very much. I declare the resolution carried.

16:22 Resolution eight sorry, 11 authorizes the directors to issue or grant rights to subscribe for up to an aggregate of 13,985,671 ordinary shares, representing approximately 10% of the current issued share capital of the company, as if the rights of pre exemption in section 60 b of the company's law did not apply. Such ordinary shares issued or rights to subscribe for

16:47 ordinary shares granted pursuant to this authority will be at a price of not less than 20% discount to the market price of an ordinary share on AIM for the ten trading days immediately proceeding such issue or grant and subject to compliance with and obtaining any requisite approvals required by the rules of AIM and the TSX. In respect of resolution 11, the proxy votes have been cast as follows. Four, ninety three million three hundred and sixty eight thousand six hundred and forty one, effectively a 100%. Against 3,589, no withheld, and abstain 501. And our proposed resolution number 11 set out in the notice convening the annual general meeting as at meeting. As at least 50% of the company's issued share capital is represented at the meeting, in order for the resolution to be effective, it must be passed by a simple majority of the votes cast on the resolution. So I can ask those in favor, please. Thank you very much. Any those against?

17:43 Let's see. I declare the resolution carried. Well, that, ladies and gentlemen, in fact, completes the formal business of the annual general meeting, and I can declare, unless there are any questions concerning the formal business, I can declare the meeting closed, and we will now pass on to the less formal side of the meeting where Alberto will present make a presentation to the to the to the meeting and welcome any questions after the presentation. Nothing most of the questions will be answered during or in the presentation. So thank you very much for attending the formal part of the meeting. Thank you. And I move over. Little bit more.

18:31 Excellent. So who is the presentation is here. Okay. Good morning, ladies and gentlemen. I will be I will try to be brief because since we all know the company, we know what happened, but I will try to explain, especially what we have as an assets assets of the company and what are the plans for the future. And later, I will welcome as many questions as possible. If you look at slide six, which I hope you have seen in the screen, we are here summarizing what happened in the year. It has been mentioned by our chairman.

19:16 The key parameters there is that we produce slightly more than we had guided with an excellent EBITDA of around €200,000,000 with decent all in sustaining cost of around $250 per pound. And the most important thing is that it resulted in all this resulted in operating cash flow of around €150,000,000 and free cash flow after taxes and after everything around 120. This resulted in the fact that we ended the the year with a net cash position, having started twelve years before with a negative cash position.

20:07 Strong cash flow generation, which allowed us to give a dividend to of around $4,750,000,000 euros as soon as we got some money back to the shareholders. And, of course, as a result of all this and a result of all these things that happened during the year, the liquidity of our shares have continued to improve and has also continued to improve during during 2022. Looking at what do we have to to achieve all this? What are our assets? Our assets are Federal Colorado, where we announced the reserve estimates that give us confidence to have over ten years mine life without any additional mine mining. But we announced what we had at San Dionysia, which is a neighbor deposit, which I will explain a bit more on about that. And, also, we started acquiring with very low entry some exploration positions East of Rio Tinto, immediately east of where we have our operations and in Zamorena.

21:13 Health and safety and ESG continue to be one of our priorities. Low levels of incidence of COVID. We basically continue working very well with all kinds of restrictions even up to the recently this year and with low incidence except the chain, supply chain that has affected in some way. For us, it's important that we try to use as much recycled water as possible. And this is an issue with the with the drop that has been ongoing into in the region. And things that we have done, all those activities, specifically thickening tailings and and reducing operation, we were able to cope with the very dry conditions that that have been affected in Spain in the last few few months few, I would say, couple of years.

22:10 So what's what's going on for 2022? I mean, our guidance is slightly reduced, and and we had a hiccup in the first part of the year due to a national wide strike in that where we had to stop production due to the lack of supplies, specifically lime. So very likely, we'll be in the lower end of our guidance around 54,000 tons of copper, still quite good and much more than we that we had a few years ago. We expect to continue improving in our costs per ton, but we are very conscious of the problems with with with inflation, high energy costs, high line costs, explosives, diesel, transport fuel.

23:05 So it's something that we are looking very closely, especially electrical costs. Even with that, the first quarter has been quite good despite all the challenges of costs of electricity going from €60 per ton sorry, per megawatt hour going to around 220. That's almost four times. But then having said that, we were able to produce free cash flow around €20,000,000, which is something that we have never expected or people have never expected years ago. And we continued having a very good balance sheet, having a net cash position of of €886,000,000. At the corporate level, we finalized finally concluded all the Astro litigation.

23:51 Unfortunately, sad to lose a very long standing shareholder like h s HGC, which basically sold their shares due to some issues with the parent company, with the debt of the parent company. These shares were placed in in around 44 institutions. There was a big demand of them for them, and this has increased dramatically the liquidity of our company. This is some these are a couple of very important events until now. Looking at our assets, I mean, where do we want to go in the future? Well, it's it's very important what our chairman has mentioned, the construction of LX.

24:37 LX is something that's going to transform we believe it's going to transform not only the our company, but also the pilot belt. And that's why we have exclusivity agreement with the owner of the technology and where we are cons starting to construct a plant that we will be able to produce metals directly. I would say first time in the world with this type of technology. And and it's very important because we can achieve much higher recoveries of the of the metals that we have in our deposits. One of these deposits is the is the Vaca Valverde, where we we already announced some very interesting intercepts specifically with copper, but also polymetallic. And where we right now, as we speak, we have four rigs ongoing, and we will be keeping the market updated with the results.

25:29 But as you can imagine, if we are keeping four rigs just because we are seeing that the the area merits I mean, requires lots of attention and has lots of potential. And very important also that we started announcing the resources that we have around Cerro Corrado. Cerro Corrado has been what we started with. We were able to this is a deposit that was supposed to be mined in twelve years at at 9,000,000 tons per year. We have been mining now for seven years. We have we are mining at 15,000,000 tons per year, and we still have over twelve years after Colorado. But now we have San Antonio and Indonesia's neighbors, which would probably add another five at least, which means just without adding a single ton, we're looking at a fifteen years life at our assets, at our plant. And this is a huge advantage in the part that to have a plant that's running and specifically to have a team that's operating efficiently. As you know, one of the most important difficulties that projects are facing is the lack of people, lack of projects in safe jurisdiction, delays with permits, delays of construction.

26:48 So having this asset in a safe jurisdiction is something that's very barren. We continue to improve our assets, and one of them will be to construct the solar plant. We expect to receive the first panels at the end of this year, transformer, the first quarter of two thousand twenty three. And by mid twenty three, we'll be producing from our solar plant around twenty three percent of our energy needs, basically, at a price which is almost free, which contrasts with the current price of around €160 as we speak in in Spain, which is is almost three times what we had last year, and this will be producing energy 23 of energy at less at less than than €30 per per megawatt hour. In addition to that, we have also signed an agreement with the supplier for ten years, electrical supplier at €52 per megawatt hour, which means that we have assured over 50% of our energy needs for for the next for for our future at at around 80% of what we used to have it in the past. So it's a very good long term initiative, which will get rid of one of our problems.

28:08 Going to health and safety, we continue to consider that essential, And we finally published the first sustainability report with all our targets, with all our our records. And also related to that, we as as our chairman has announced, we we welcome Kate Hardwood to to our board. She's a very well known specialist in ESG environment, and I'm sure it should be a fantastic addition to to our company. So that's really, in a nutshell, what we are going to be doing. And we are going to be doing this with the assets that you see in the picture. Basically, a nice looking open pit Cerro Colorado with a fantastic plant that's neat and tidy and is operating very well, treating over 15,000,000 tons per year with very good recoveries.

29:04 And in the slide 10, you will see what we talk about San Dionysio. San Dionysio, this is a sketch to show you what we have in this deposit that's just sitting few 100 meters beside Coralado. You will see some shadows in blue and pink and red. Obviously, the darker color, the the the warmer color is higher grade. All the upper part has been mined, as you can see, some dark areas mined by underground methods in the last century, while the previous operators left all those bluish and purple, which are high copper, almost with double the grade that we have in Cerro Colorado. In the lower part, this area that's shown in red is our massive sulfides over where Albit has been mined, but most of it is there.

29:53 This contain copper and zinc, quite good grades. All, as I say, most of them will be mined by open pit. And and that's the reason why we it's so important that we'll get this LX up and running as soon as possible because it will be essential to be able to recover the zinc. And with this, our copper equivalent grade would be much higher than we have right now. Another important assets we consider is the aspirations. What you are seeing there is the area around Maceo Val Verde, an area with no population, just hills and barren trees, eucalyptus, where we have four rigs ongoing. This project is located 25 kilometer from us in the middle of the Park Belt, and we have lots of hopes there. So another pillar will be exploration.

30:41 Another pillar will be the last pillar will be Toro. Toro, we had a negative environment pact declaration in two years ago. We have been working with the authorities, and now we have decided to take care of the water situation. That's a small acid range from previous operation. This is our brownfield site. And we here have decided to build a water treatment plant ahead of the permit in conjunction, obviously, in speaking with the authorities. What you see in the picture 12 is is how this construction was going just one week ago. I can report that it's now being commissioned as we speak. It's been loaded with water.

31:29 Looking at the size of the people there in yellow, you can see that this is not a small Mickey Mouse plant. It's something that we have built very fast and with good quality. And these authorities have been very pleasantly surprised to see how well we responded to something that was not our responsibility. This we had a plan to we had a plan to take care of this acid waters after we had started total project, but we decided to show that we could do it even before because we had faith that this project is going to be permitted. I continue to be totally convinced that we are going to get all the permits that are required for total, and this probably will be the next value added for our for our company. And finally, you have a copy of you can see the sustainability report of '21. Before that, we had we had published an approach to sustainability.

32:24 It's all in our in in our web page, and you can see in all type of details what what we are going we are we are doing and what we will be doing. In a nutshell, in the last slide before I get to to to to reply some questions, you will see the big big targets for this year. Solar plant in plant, including permits to go underground. Some of initial get permits to start mining as soon as possible. Total, continue with the permit state stages and finally get the permits, explore in Osa Morena. This region is just North of Rio Tinto.

33:09 It's totally different area with gold and silver

33:15 showings where we are going to be spending, like, 2,000,000 in exploration and construct. All this will result in in our ICR company as summarized in the slide 15, going from the 56,000 tons of copper produced with the addition of the higher rates of San Denisio and other deposits to get into the 75,000 tons, 70 to 75,000 tons of copper because we already have our our our plan there that's able to treat that. With the addition of total, we believe we are going to be getting into 100,000 tons of copper, which is very serious operation production in less than two years. Remember, I remind you that six years ago, we were looking at 25,000 tons of copper. This is multiplying by four.

34:09 So this is just a testament of of the teams that I am happy to to to lead. They are fantastic, and they have been delivering always valid to this company and valid to the shareholders. We will continue with doing it within that, doing it as soon as possible, as efficient as possible, and as as we used to say, without without money. We used to joke saying that building minds with money is is quite easy. Building it without without money, it's it's really a challenge, and we have been able to do that. So once now that we have money, it's it's going to be much faster and much easier. So, really, that's that's the main the main part of the presentation. And I have here some questions that that I'm going to read for those here present or those that cannot access the computer.

35:04 I have a question from Martin saying, can you confirm that LX mainly involves a system for putting copper into solution after crushing, which can that can be used for electrowinning. What are the main savings from the increased ore extraction? How does electrowinning cost compare with total smelting cost? Can you give us a guide for the overall percentage saving from using? Okay. Lots of questions here, but let me start by the first. This system puts copper into solution normally after you concentrate it. So it's an alternative to to sell your concentrates to a smelter. The good thing it does is that smelter normally penalizes you for having impurities, and, also, you have to have certain quality of concentrates.

35:55 By putting it into into solution, and then after that, you you go to when it's winning, you sell a product of 10099.99% copper, which has better payability. They don't make a discount. Sometimes they even offer you a a premium, and it is more economic. But the most important thing then the next question is, what are the main savings for increased ore extraction?

36:22 Actually, it's not a saving. Actually, what it is is that what you have is from the same ton of material. Instead of extracting 75% of copper, for example, from a complex ore, you are extracting over 90%. So, basically, from the same rock, after that you have to mine it, you have to grind it, you have to float it, you are getting 15% higher revenues, which means lower cost overall.

36:48 How does electrowimming comp cost compared to total smelting cost? Well, it's difficult to compare in cost itself because the reality is that's high recovery. So at the end, it's it's much more revenues. It's like having a much higher much higher copper price. You get more dollars per ton. Even if they were at higher costs, you will get will be much more efficient. In the case, if you wanted to compare to smelting cost, probably will not be economic over a clean concentrate because smelters are very efficient. But in our case, we are we don't have a pure copper deposit. We have a copper deposit with zinc and lead, which right now is is lost in gold.

37:36 Right now, all the zinc that goes into into our concentrates is just lost. Somewhere, it's recovered, but we are not paid. And just for an as an example, we get 10,000 tons of zinc included in our copper concentrates every year, which at current market price would be, like, $30,000,000, but basically is lost. This system, we will be able to recover the zinc in addition to get a better availability of the of the for the copper. And can you give us a guide overall percent of saving from using Elix? More than savings, what it will be as a much higher revenue, and I can tell you that application of Alex in our deposits will probably range in over 1,000,000,000 operating cash flow for the company. So it's transformational.

38:23 It could be basically doubling our market cap if this was applied More than doubling. Richard is asking, could Alberto please give us the views of the price of copper over the next two years? And, oh, I can give you my views. I can give my views, but if I knew, I would I wouldn't be here. It's an interesting question and also Richard. I suppose it's Richard Scarry. Yeah. Yeah. Richard Scarry. It's interesting question because lots of people have been wrong saying that the copper was going down. And once everybody type changes, everybody saying it's going to be going Now we're in a period where after reaching $470 per pound, now we're back to $4.

39:12 And then we are hearing we are hearing stories about China slowing down, about about lower consumption, about COVID restrictions, about the chain supply issues, and this is waiting down the copper price. So I believe we will see a period of lowish copper price. But remember, lowish copper prices of $4 was a dream that nobody thought was going to be happening three years ago. Three years ago, all the the projections were looking at $3.50 long term price, and we have been over $4 now for a year and a half. And what has happened in years this year and a half? No single big project has been sanctioned for construction even being at $4 per pound. How come when everybody was looking at higher copper prices at being $3.50 being economic?

40:09 There's a reason for that. There's a huge capital capital escalation, and the the capital intensity for new projects has gone up from the $15 to $30,000 per ton of copper produced or even higher. What does it mean that copper projects that have to be built will not be economic even at $4 per pound? This is the first thing. Second thing is when people now start looking at their other trying to sanction new projects, they will be seeing that they they will have to put the inputs of energy, explosives, gas, fuel, transport, and so on. What does it mean? That although they had a a project that when FEAR was going to work, when they had to update those figures to go to their boards to get an approval of several billion dollars, they will find out that doesn't work because it's not possible to go to the board and say, well, yes, but we believe we want to invest 5,000,000,000, but we believe that the gas prices, the fuel, and everything is going to go down and copper is going to go up.

41:16 Why I say all this, Richard, is that I think that we are not going to be seeing new copper projects being built or being decided to build in the next few years. So it means that from the supply side, we already had negative news. The only good projects that have been operating as are those operating plus those in Congo and few other that don't make a big change. But in the demand side, what we are seeing with the the decarbonization and then the all the things that happened in Ukraine, what was the response from the West? We need more renewable energy. That includes China, by the way. China, besides putting more coal into production, Germany, more coal again in order to cope with the gas, everybody is pushing wind and solar.

42:06 That requires more copper, much more copper. There's more people in the world which require more copper. The people in the world, even even if there's a slowdown in China, which there is right now, there's a big unemployment, and China will have to will have to make incentives, which will probably be growing their their infrastructure, which means more copper. So I believe we will be seeing a short period of of copper kind of a slowdown due to new production coming in, but I see the copper okay. Let me try to bet. In two years, well over $5 per pound. Well over. What I mean well is well over. So that's the response to Richard. Okay. Long one, but that's the reason why I think so.

42:56 I can tell you one thing. I can tell you that constructing mines is extremely difficult. They're in the middle of nowhere. They are remote, require billions of dollars. The big company the big ones are in the hands of big companies. Even if they were sanctioned now, they would not be in construction or they would not be in production in less than five years from now. So in the meantime, the the world continues demanding copper, and all this thing that we hear about recycling is not that easy because there's really need for infrastructure. Copper is going to go up even if we see a hiccup. David Noble is asking, Alex, do we have any other economic interest in this project of any interest parties ATALAYA linked to line or or any interested parties ATALAYA linked to to Lain Tech?

43:49 No. We have a right of first if she sells, if she goes if she tries to sell total or partially her technology. We have given we have funded the their part by loans, so these loans are warranted by LINE technology, and we have an exclusivity in the. I hope that as we offered to buy some equity in LINE. Unfortunately, the owner knew the value and was not ready to sell it. But but, basically, we have the rights to we have the rights to buy it if she tries to sell. In the AGM release, we are reminded that the technology is owned by by LINE Technology.

44:35 I I thought ATALAYA had right to resell the technology in Europe. Is this correct? No. It's not correct. What we have is is that exclusivity in the belt where it's it's direct implication, and we have the right of first refusal worldwide. Total or partial, if she wants to sell at 10%, we have the right of refusal right to match that. And, of course, we will be the first user, and we know a bit more than any other. Can we have more details on how long we have in the such rights? It's it's basically ten years. It does seem ATALAYA has developed this project before then I was it was already theoretical. Well, ATALAYA has been given financial help because to give somebody young having a good idea to lots of money to to install an installation. It requires a lot of faith.

45:27 And the only reason we have done that is we were checking the advances physically, and we were shown the cathodes of copper and the ingots of zinc, which is something not many people can can can show. And we believe it's going to work. We know it's going to work. We are just checking the practicalities when you build a larger scale because sometimes, let's say, a small battery can work small, but when you will try to make it big, it it it requires some other engineering thoughts. So we are very sure it works, and we are very sure that the the added value. Having said that, when we calculate the the reserves at some the of places, we are calculating those assuming LX doesn't exist.

46:13 So we are using the conservative proven approach of notation only. Paul is asking about target completion for ELX. Before, there is some delays in some supplies, but at the end of this year, we believe everything will be ready for commissioning at. David is asking, is it possible to have a recap of what percent of our copper output is in the offtake agreement? How long this will last? Is there any advantage on this amendment to be this agreement? Well, we only have right now we have three offtake agreements. 50% goes to a company called a trader called IXM, which is controlled by Chana Moli. Around 30% goes to Transamine, which is a Swiss French trader, very well known. And now around 18% goes to Trafigura, which is one of our shareholders.

47:10 These agreements last for the tons of copper produced by Federal Colorado in the Port 3101 report that was published in 2013. In theory, those will probably be gone in around three or four years from now. What is in what's in San Dionisio, San Antonio is not included, and whatever we produce all other metals is not included. Having said that, the ribbons are arm lens. They are very conventional. They don't have any any strange wording. We get paid 96 and a half percent of the copper, which is very conventional with a minimum deduction, and the penalty elements are are there with typical standard deductions, which is something that sometimes could give us a little bit of an advantage or a disadvantage if we didn't have it, would be that we would probably be able to bargain with other traders and get better freight rates. Because when you or you have a a good saving is the potential of of use some combination of freights that other traders may have and not this this can have. So that's probably the only one that that's a disadvantage.

48:27 David is asking ESG, are we getting indication yet where we stand relative to other miners? Where do we rank? Do you have a goal top 50, top 10? Really, I don't know. I don't have information. We believe that we have a fantastic operation that are seen as a mobile. People have visited, see that we are around villages with mining going on less than 200 meters from houses with daily blasts with a main road crossing the pit and employing around 80% of the population with from these villages to have been trained them from from scratch, It means we would rank very highly in in ESG parameters.

49:16 We recycle all the water. We have zero discharge policy. We don't throw anything to the river. We've had some things that are kind of first in the world, like controlling monitoring of dust online based on the direction of the wind so that we can move the blast to make sure it doesn't go towards the school or towards the the time for the school, the children are out. All this thing is recognized. All the thing is made in a transparent way. We have visitors, touristic tourists visiting the site with buses going inside the mine, full transparency, no dust at all in our operation with irrigation. I think we are setting a very high standard, and I would say that we are ranking very, very highly in all these ESG matters. In transport, we have been one of the first companies who signed a a protocol of the United Nations with some targets that we make public.

50:10 And in Spain, we are considering a model to follow. And I think, eventually, this will also be compared with other other parts of the world. Paul is asking, is there an update in '20 or an estimated full 22 power cost given recent EU ruling on a spy Spanish pricing change protocols? Well, here, I will have to refrain just in case somebody of the government is is listening, but but the Spanish government has agreed to cap the gas prices. The gas constitutes more or less the is really the indicator of the electricity prices, the marginal producer.

50:58 So the gas prices in Europe have gone from typical 30, 40 to around 300 in the with the war. No. 280 in the war. Now they they went down to $80.90, and the Spain and Portugal were able to to reduce this to 40. But what was not published is that they they had also agreed with the suppliers of electrical companies to compensate them for these losses. So on the first days that this law came into into production or into operation, the electrical prices were very high because they were coincident with a two weeks very high heat wave in Spain, and it was, like, no change. So we're still in the $200 €200 per ton per per megawatt.

51:51 Now with the heat wave gone, we are around 150 and going down. We expect it to get to the 120 in in '22 during '22. Long term, all the futures are pointing towards the $40.60 because Spain is is very strong in wind and growing and in solar and growing. And also because we are not really dependent on the gas of Ukraine, but the gas of imported energy. So long term, I have seen it we are seeing it in the 50 range. In the short term, the last six months, probably in the range of 120,130. We still double than it was last year. Last year, we had around 60. How will a strong dollar affect your business?

52:38 Well, it's better for us because, the cost the exchange rate last year was around $1.17. This year has been averaging around $10.05. Around 70% of our costs are in euros, so means a weaker euro is better. So that's kind of compensating a little bit the our cost. The only things that are in dollars are the TCs, RCs, the refining cost and transport cost, and also the shipping cost, which have gone gone up quite a lot due to the price of of of fuel. Having said that, also, a lower euro is bad for the country. It means that our our diesel price, which we import, is is higher than, I would say, normal. The diesel price has more than doubled in the last year, which is bad for the mining costs.

53:33 David is asking, mining in Spain, has the political landscape view changed? Early days of imminent hostile and lack of trust. Well, look, was a special case. Was a company with probably, with good good hopes and good intentions, but bad, probably lack of knowledge. The reality is that within these days where was was trying to permit, the mines of Aguas Tenidas were permitted, including the tailings. The mine of of Las Cruces was up and running 700 meters from a motorway, having to move a river and just in the outskirts of Seville. I was working in a mine in the North part of Spain using on top of a village and on the river.

54:23 So, you know, at the end, it's not I mean, that legend of of having a hostile, let's say, landscape against mining is not that quite. There was, everybody knows, the the problems of Berkeley trying to permit uranium open pit in Salamanca after having a positive carbon tax statement they got didn't get the final ruling. But it's uranium. It's open pit. So I don't think it's more different than what would have happened in any other place except Canada, which is in or maybe Namibia. The rest would be quite challenging. So I don't think there's such a hostile.

55:10 To the contrary, we have been told that we are going to be included in in the case of Toro as a priority project. So, eventually, this will speed up permitting. In the in Andalusia, we are already included. Mining is already included as priority project, so it's being pushed. Recently, we had elections in Andalofia, and the conservative party, which is in favor, has won full majority. So we were going to enjoy we believe we are going to enjoy four years of stability at least. And and also recently, the extreme leftist party, which is in coalition in the Spanish parliament, Podemos, has tried to pass a law against not against, to change the money law, which will affect very badly.

56:05 And this has been rejected at the parliament, including their own including their own partners. So there's not a such a anti mining thing in Spain except for some people that are very noisy. Richard is asking, is the board considering installing wind turbines as an alternative additional source of energy? Yes. This has been discussed at the board level. We have installed already some we're in the process of installing some measurement at high altitude, but we already have a a pre feasibility study based on measurements on on-site. This would be this will include the installation very likely installation of four turbines behind the hill Of Cortatalla, which would produce around 18% of the energy needs.

56:50 It would also be for self consumption, which means will not be going through the through the through the net, the public network, which would mean also less taxes. And, of course, if that is finally approved and installed, we are still in the final measurement phase. It will mean that our our company will have over 50% of of clean energy for self consumption plus another 30% of a long term purchase agreement with the electrical company. Paul is asking, what thresholds achieved would tell you the time was right to upgrade your listing? Well, we are in the in the process of changing the the domicile from Cyprus to to London to a new company. This is is very well advanced. And very soon as soon as all the paperwork is finished, we will have a new AGM specifically to to to to change this this domicile to to London.

58:00 And after that, we will go and and list in the main market and the list from from Canada. Eric is asking, could you give me any indication at this point if the dividend of any quantum will be announced in August? Well, it's I don't know if I can say anything anything before August, but I think so far, there's no indication that we have changed our policy of giving between 30 or 50% of our free cash flow back to our shareholders, and so far, there's no change. So I believe between now and August, unless there is something extraordinary, we believe that we will continue with our policy. David is asking, Spanish strikes, knowing you you will be stocking up raw materials in spare parts. How many days will be able to operate when this thing strikes again?

58:48 Well, we don't know, but, the only issue we have here is lime. Lime, we only have, like, five days of storage, and that's the maximum we could probably have. Normally, that will be the case if if it affects transport because normally, the strikes do not go to to everything. The country will not they will not stop. Otherwise, spares, everything we have enough for even months, if not years. So, no, I don't think strikes will affect at all. And, well, I think people have got tired of making of asking questions, so I'm very happy. Any question here present, anybody? No?

59:35 Well, thank you very much for this interest. And, again, please, I want to insist a lot to thanks to the shareholders, to the long support that we really appreciate. Also, thanks to my people. Thanks to the team. They are incredible. They're really doing a good job. And, look, this company has a lot of future, and we have come a long way. So we're not going to stop now. Thanks. And I think we can finish the the meeting. Fantastic. Alberto, Roger, indeed, thank you very much for updating attendees for today's AGM. Please ask attendees not to close the session. We automatically redirect it to provide your feedback nor the board can better understand your views and expectations. This will only take a moment to complete. The note is greatly valued by the company. On behalf of the board of ATALAYA MINING COPYM, we'd like to thank you for attending today's AGM proceedings.

1:00:24 Thank you very much, and that concludes today's session.