Atalaya Mining Copper (LSE:ATYM) — Q3 and YTD 2023 Financial Results

0:00 Good afternoon, and welcome to the ATALAYA Mining PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and 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 it receives during the meeting itself. However, company will 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.

0:30 And I would now like to hand you over to CEO, Alberto La Vendera. Good afternoon to you. Hello. Thank you very much, Alex. Welcome, everybody. Thank you for attending this presentation. We will try as usual to be brief and leave some time to questions. We are here to look at the results, quarterly results, financial results, as well as looking at the advance of the company during the three months and our plans for the near term future. With me, I will have Alfesar Sanchez, the CFO of the company, which will reply to some of the questions related to the listing and to some legal things.

1:28 The summary of our results is included in the Slide six. And without trying to read all the numbers, which you're happy to go through, we had already pre released the production results. Production of 12,500 tonnes of copper during the quarter, getting the total today to close to 39,000 tonnes with cash cost of $282,000 accumulated to $76,000 and all in costs accumulated around $307 for the year, which are taking us to the outlook for the year of around 53,000 to 54,000 tonnes of copper.

2:15 Now, we're in mid November due to some heavy rains experienced during the quarter, the current quarter, we will likely be in the lower range of that 53,000,000 to 54,000,000 anyway, very close to what we had already agreed. And the cash costs, it looks like we are going to be also within the range that we had said, the all in costs.

2:43 With all that, we had a quite good, I would say, results, probably better than the consensus, with EBITDA of €19,000,000 which is equivalent to €60,000,000 year to date. There was one reason for this, let's say, better results is the electricity prices were lower than previous year, still high, still high. And besides that, we continue having a very good balance sheet with net cash position of around €67,000,000 And this is after continuing to invest in the solar plant and continuing to invest in the LX plant, including dividend payments and also including, of course, the ongoing capital.

3:32 So, with this kind of lowish copper price, the company continued to generate cash during the quarter. We have made some changes within the Board. Not the Board has not changed, but some of the roles of each of the directors have been changed a little bit.

3:52 And the most important thing from the corporate point of view is that we have announced that we are going to apply to move from AIM to the main market. That has already been done. And we are in the process of doing that. And I think we are just spending some technicalities and finalizing some documents, but we are following our plan to do this before the year end. And in addition to that, which although they are not necessary they are linked, but not necessarily, also the proposing to move, remove this redomicile, the company from Cyprus to Spain. There are several reasons for that.

4:38 And this part of them are as a result of the Brexit and the fact that The UK is not longer in the EU.

4:48 From the assets point of view, from the investments point of view, we continue to progress. We continue to progress the construction of Felix. Things are moving quite fast and the solar plants are also moving quite fast. And especially the important thing is that we are we got already some authorizations of for the extensions of the mine life in Rio Tinto, which include the expanded tailings for 150,000,000 tons. So this is a huge achievement. Also got the for Basal Algarve to be able to extract ore from there and treat it in our plant. And the most important point here is that we are advancing with a stakeholder in permitting in Toro.

5:35 As you can see, Toro is the most important thing. It doesn't seem to be progress, but there is progress. There is progress with paperwork being done and especially from the Junta making some new laws in order to expedite and to permit projects, and specifically mining projects. This new law is going to be coming into place in the beginning of the year. So going directly, health and safety, you can read things which I think we have already mentioned in the past, publication of our sustainability report and then certain data that we continue to operate safely in this company. Going directly into the data that Dias mentioned, just a few remarks. The plant continued to perform well within the line, well over the 15,000,000 tonnes design capacity.

6:31 Recovery also going well, better than planned. And the production was slightly lower, and this is a result of maybe basically lower grade. Lower grade is a result of the way that we are going through the pit, and we believe this thing is going to be improving in the near months because we are going through an area of lower grade at the pit. As a result of that production, sales, as I said before, slightly higher due to a little bit better copper prices than the previous quarter. And the most important thing is also EBITDA going better than the previous quarter. And as a result of that, the cash flow and the net cash position continues to be good similar to previous quarters in spite of having given having distributed a dividend and also having continued to invest in several projects and growth projects at

7:35 outside. The We ended the quarter with €120,000,000 in cash, which is a good position to have and with borrowings of 52,000,000 having paid some of the lines of credit. And we continue to have a good working capital surplus of around $7,000,000 which is basically around $85,000,000 Part of this is the improvement of the market in the electrical market. But as you can see, actually Q3 due to the summer months, very similar to what happened in the previous year has been higher than the previous quarter, but of course, much lower, less than half what happened in year 2022. You can see it very well in the graph. In year 2022, our cost of electricity was €300 megawatt hour and this one this year was €120 In addition to that, we had, as you know, a power purchase agreement for around 30% of our needs. And so the average result has been lower than that.

8:51 The good news is also as expected that the electricity prices have been so far in October and November have been lower than the previous quarters. Also, it happens in previous years and it should continue to happen in January due to the strong winds very strong winds, very strong storms and rains in Spain, which reduced the need of gas, although the gas prices are slightly higher. So, I think this is all going well in the good direction. From the cost point of view, very, I would say, flattish quarter in general, in mining and in process.

9:44 But you can see that the cost of the quarter have been slightly higher in mining and processing. This is basically due to the still the inflation that we can still see in explosives, diesel and gas. Gas is affecting life. But also, it's the effect of lower production due to the lower grade. And then most of the costs are cost per tonne. And the effect of that is that we have slightly higher costs in a cost per pound basis.

10:22 But we overall, there's point $6 difference in cash costs versus the year to date and well below what happened in the previous years. You can see that we have had capitalized stripping high capitalized stripping. This is due to the start of the waste movement in San Dionisio and also at Cerro Colorado, our current pit, in anticipation of the starting to move in the new pit called San Dionisio, because the contractor is only getting the new trucks and excavator by June. So, they had to advance a little bit more with their equipment during this quarter, and they will continue to be doing that in the next quarter before we get ready with supply of the equipment.

11:25 But, of course, overall, this does not change at all the strip rate of Cerro Corrado, which is a little bit less than two:one. Going comparing with our peers, we always show this picture. We continue to try to control our costs. I think we are in a good shape with compared with other peers similar to us. And the first thing you will notice is that the tendency of increase, of course, that you experienced in 2022 has been stopped, while in other companies, this has continued due to several factors. So with this, we continue to generate cash.

12:10 There's only one point five months to go. So as I said before, the guidance, there's no reason to make changes in the guidance. We will be likely in the lower range of the guidance for production of 53,000, so very close to 53,000, 52,800, 53,200, something like that, plusminus, so not in the 54,000,000 still

12:38 good. Recover is a little bit better than expected originally. And the cash cost, they will be in the range. Everything from the capital point of view is also within the grade, the range. So now looking at what we have been doing simply

13:03 from corporate point of view, we have announced that we are moving to the main market. These things are moving very fast. And the addition documents and all the papers are almost ready. And the prospectus is going to be published soon. Certainly, we will be ready for the end of the year. The prospectus will be published without having to need without needing to raise any fund. There are several conditions, but we have been in constant contact with the stock exchange, and we are fulfilling all the issues, all the paperwork needed.

13:55 So we think the time to be accepted for the listing will be in December end of December twenty three. So very likely, instead of being listed in name in '24, we'll be listed in the main market. As you know, this has lots of implications.

14:17 And one of them is that this opens the possibility of being included in index. And we have seen that there are a few questions about this in the Q and A. So we'll go through them. For that, we'll have an AGM, an AGM, especially in our offices in London, the small offices in London. And you're welcome to assist for those of you that are available. The main question will be to consider the potential reutilization because this reutilization is a requisite to be able to be included in the index. If we were we continue to have our domicile in Cyprus, then we wouldn't be entitled to be participating in the index due to several reasons. You have to find some other country.

15:22 This paperwork is linked, but not related to or not totally

15:32 conditional to the listing. And it will be finished, expected to be finished, the resolution by sometime the end of May, due to the paperwork it has,

15:48 if it's approved by the shareholders, of course. With that, we will be one of the fewer copper place in London, small, but hopefully we will be able to grow and we included in the index. It's important to be included there in the index because we show this picture here.

16:14 We are still of the belief that the deficit of copper is there. It will it's increasing. And there are numbers of copper deficit in the world between 4,000,006 tonnes of copper by the end of the decade of 2030. And all the indications are that this is going to be there and simply there's not enough copper coming on stream. An important producer, Codelco, the larger producer until recently of the world is going down and they need to do a lot of investments just to maintain their status quo. And actually, they have already guided for the production of this year to be lower than previous year. Actually, they're lower in five years. And next year, they only show a very modest increase, which is basically flat is totally assuming everything goes all right.

17:04 The reason why there's still some potential

17:08 oversupply in the market this year has been twofold. One is the reason is that coming on stream of Quebrada Blanca with a huge delay and a huge investment and over investment. Teck, Quellaveco by Anglo American in Peru after long delays and Corre Panama. These are the main reasons why there's a kind of oversupply this year. What happens with these three is, first of all, the big one, the first one, Quellaveco, huge overexpenditure and delays, means that Teck has already said that they were not considering any further expansion in the next twelve months at least.

17:45 Quellaveco, it's ramping up, but so far, I have not seen any brownfield expansion. In Cobre Panama, you probably are aware of the problems they are having. And there are even rumors that this thing this mine could shut down due to the award of the concession being inconstitutional. We don't want anything bad happening to our colleagues of First Quantum, which are excellent operators. But the reality that shows you how difficult it is to be getting new mines into production and also how risky it is in certain countries and how country risk is so important. That's why we are so happy to be in Spain and specifically in Europe. Obviously, if this mine stops for some reason, then the copper price can go to any point.

18:34 But even in places that are very well known like Chile, the largest mine of the world is Escondida, as you know. Escondida is producing around 1,000,000 tons of copper and this graph shown in the presentation, it has been shown by them. In four years' time, their production dropped by zero five million tons. Zero five million tonnes is larger than any of these mines that I showed before, Quellaveco, Cobre Panama or Quebrada Blanca 2. It means a huge new mine disappears just because of the grades going down. Does it mean this will happen? No. It will I'm sure BHP will invest whatever is needed to maintain the production.

19:20 But that shows you that even the largest mine of the world in four years' time needs a huge investment not to grow, simply to be to stay in business, simply because the grades are going down as most of the mines do. We are very bullish in the copper market and this is what why we wanted to bring these slides. Let me finish with how things are going. On-site, in first place, you see this in red, the Helix plant. The Helix plant is advancing quite fast, shows the size compared to the rest of our installations. And in the background, you will see a flattish surface. That's the position where our solar plant is located.

20:10 If we went inside Helix plant, there's not much pictures there because the company that has the technology doesn't want us to publish pictures to guide people to because this is something new. But I can show you that the process is huge. It's going very fast and

20:32 planning to start commissioning at the end of this the month of December. And even having some initial production, even if it's only trial stages in the end of the year or the beginning of twenty twenty four. So we have some delays, but things are finally going full steam. Same thing we can say with solar. The solar, this picture is probably a bit old.

20:59 The construction and implanting of panels and support is advancing very, very fast. And we already have a schedule with the

21:11 electrical company to connect to disconnect our substation in for a few days from the 132 lines to connect the substation to our substation and to the grid. And this will be likely the first week of January, meaning that any time from then on, can start producing from these electric panels. And this will be huge cost saving for next year, starting basically already in January 2024.

21:47 And we continue to have a good support in total. Things are going slowly, but advancing very well. And here, I can report that the Junta del Dorado, the local government, Junta del Alifia,

22:07 is passing a law, it's going to be working in January, in order to expedite and improve the timeline for approval of projects. They have created four category of projects, Industry, another one specifically called Energy and Miles, where we will be specifically included. Another one is Agro Business and another one is Forestry.

22:37 Those projects qualify and we are there. And this law is this law is passed, as I say, starting in January, it's being discussed now with full majority. The projects will have a maximum of one year of timeline for permitting, warrantied by the local government, even with compensations for the costs that this creates if permit if the project is not approved.

23:03 This is directed to specifically some large projects like ours that have some controversial disputes by environmentalists, as well as wind farms, both onshore and on offshore. We are including that one of energy and mines. So, think it's quite good showing very good support from the local government, which is working reviewing all the documents and we are seeing finally the time for the permitting of Toro. In parallel to that, the company continued our teams continued to work in optimization of that project, looking at that equipment, preparing engineering, so that whatever time we lose right now, we will be able to compensate it later with bringing this into production starting sometime in 'twenty four and have it constructed by 'twenty five. And we believe that this is possible. Time where we believe that the copper deficit will be at its size.

24:11 So I think that's probably taking a little more than I expected. And so this I'm going to go into questions. Please feel free to add to the questions, but we have some that have been submitted. Some of them related to the listing are going to be replied by Cesar. And the first one actually is for Cesar, which says, how is the process of listing onto LSE going? And the updates. Although most of it has already been said in the presentation and by me, but Faisal, do you want to add anything? Yes, sure. Thank you, Albert, and hello, everyone. So we we've been working for a number of months now to basically get communication with the FCA, which we already have a few draft of their prospectus submitted.

25:03 And and so I I would say that nowadays, the public information, we have and even define no deal breakers for being listed in in in the main board of the London Stock Exchange. And as Alberto mentioned, we're expecting to have that trading in the London Stock Exchange by before the end of December. So it will be sort of a mid mid December. So so guess the short answer to that is I think we are going pretty well and aligned with our expectation just to be traded in on the long term before the year end.

25:44 Second one is, how do you see the price of copper moving in the near term? Could China decline in the real estate market and decrease copper usage be an issue for our firm? If so, how we manage this issue? This is correct in the sense of there is a kind of decrease in the real estate market. But I have to say two things. One is, there is a kind of contradiction in the real estate decrease, when you see that the iron consumption and the steel market is booming with iron ore prices getting to record highs, which is are specifically due to the huge demand of iron for construction. So, which is normally the predecessor of the copper, because obviously, you have construction is followed by copper.

26:36 Having said that also, the real estate market decrease has been more than compensated and actually China has been growing month by month the copper usage due to the huge demand on green energies, specifically wind and solar,

26:56 but also as well the grids related to the electric vehicle, where China is the biggest producer in the world. And this is more than compensating the decrease in real estate. If now, it looks like the China's government are

27:15 implementing measures to give credits and to rebump again the real estate market. This is going to be a huge bonus in addition to what's going on. So we don't see a real decrease in copper usage right now. In addition to that, there's a second thing that we saw yesterday or two days ago with the meeting of the two presidents of China and The U. S, where they have agreed in certain measures to implement green energies, wind and solar, which I don't remember the number of gigawatts, but it was huge. Meaning that the extra consumption from what I've seen in the reserve from Citi, extra consumption, if they did this goes up to 2,030 with these two countries, would be an extra 2,500,000 tons of copper per year, which is basically 10% more.

28:15 It's so much that's almost incredible. Yes, this commitment between these two countries. There's certain logic to do this. The logic is that China is the largest fabricator of solar and wind turbines. So not only they're installing themselves, but they want to install it outside the world. And in The U. S, I think they have a huge potential of cheap and fast energy.

28:40 And I think there's a quite it's quite a good news to see these two big large economies of the world getting a common goal, which is the green energy, which will more than compensate the real estate. Do we have a plan B if the price of copper goes down? Well, we don't think it's going to go down. But if we have a plan B, we'll have to adapt like we did in the past cutting we have been through periods of very low

29:10 prices of copper and we managed simply cutting costs in things that are not essential like exploration or some investments that can be delayed slightly like one or two years, not without having a big issue within the long term value of the company.

29:32 Our next question it raised to from the original articles of the Association of AIM listing, there was it says that there was an extensive database inherited by the old Cypress company, basically, Opsiana. And they had interest in the Mesothoic Belt, 3,000 kilometers of the Tethyan Belt. And there was a strategy to look at the jurisdictions or so on and so on. Well, this comes from the times of Emed. The question is, is there anything left from the legacy goals of activity of Emed? Are we still working from this database information and prior knowledge? Well, I have to say that we that this database was not very useful.

30:21 The investments that had been done in places like in Georgia and in Slovenia were not really very good. We and even in Cyprus. We long time ago, we finished with the commitments that were done there. We're basically spending money without really any potential. And we have been focusing in growth, yes, but we have been evaluating things in South America, some in Central America, Spain, Portugal, North Of Europe and Eastern Europe. And that we continue to be very active and all the time, but really we're not using too much the database that's available from IMiDays.

31:14 IMED has some assets in Bulgaria, Slovakia and has a big focus on Greece. Do we retain any assets? No, I've just mentioned that we don't have anything there since long time ago. Is which ventures fully owned by ATALAYA? No, I don't think so. It has a 3% in Kefi, down from 3.8 Either way, what's the ATALAYA stake in Kefi? Are you holding or selling? Given Kefi management previous experience and understanding of IMED, is there not any opportunity to partner with Kefi Gold Project in Ethiopia and copper in Arabia? Have any talks taken place? If not, could it be worth to expiration as part of their phone call?

32:00 We'll take that advice and maybe give our call. I have to say honestly my own opinion. We I tried to sell the shares of Kefi when still the people that were there in Kefi, basically, Emir were here. This is nine years ago. Nine years ago, the promise that was about to start in production in Ethiopia and the shares have gone asymptotic to down. I don't even know what we have right now. Maybe Cesar has the We really have around 4,000,000 shares of CAFI, which is worth around just above £20,000 At that time, was worth several million. So, CAFI is a example of how money of the shareholders is not wisely invested. I don't think we see any value in getting into these things, which by the way, I don't know if they have any value or not. I simply see the results are not quite good.

33:07 From Cyprus next question is moving from Cyprus to Spain and ending in Canadian listing. I fully understand the motivation to move from Cyprus and the cost of running Canada listing versus actual volume. However, I believe there were certain anti hostile takeover advantage when enjoyed from our current previous setup. Am I correct in this assumption? What will change? I think probably yes. Maybe Cesar can reply, but the reality is that there were certain limitations of ownership being in Cyprus. But at the end, we only have one big shareholder, which has 22%. And I don't see how anyone can make a takeover bid without having without agreeing with this large shareholder or with other two that we have, call us with 13% and few others that have 5% or 6%.

34:05 So, I'm we are quite relaxed from a hostile takeover point of view, to be honest. But I don't know if there's any big change, Fesher, with this Yeah. More than a chain, I can give a clear guidance about what should be expected. So we we're speaking about the reconciliation to Spain. But if you if you take one step backwards, we I think we tested at the market for a number of months to be listed in the main market. And one of the benefits of being listed in the main market is you can be eligible to be included in one of the FTSE index. Now in order to be eligible for to be one of the the those, you you need to apply The UK corporate governance code. You need to apply The UK city code, and and you need to basically be the one country, which, unfortunately, Cyprus is not qualified for. So and and that's the main driver about leaving Cyprus, which would be, you know, for a number of year, and we think that no longer represent or interest in the world.

35:10 And that's why we we decided or we we decided to propose to the shareholders to approve to to initiate the company in Spain. Now once we do initiate in Spain, we would also approve, you know, the adoption of The UK corporate governance code and The UK city code. So when you in terms of m and a, I'm now addressing the question the specific question. In terms of the m and a, so you have enough provisions in The UK company law to basically apply The UK city code. And and and all the provisions included in The UK city codes will apply to ATALAYA once we are listed and once we are in Spain. And that answered the question. So, yes, we had some old provisions coming from Cyprus, which but they're not significant what we would be applying now in as part of that being a Spanish company listed in the main market.

36:06 The next question is also related to the listing and to the domiciliation. Domiciliation in Spain. Did you look at other your authorities? At one point, I think you were considering The UK. Is this correct? Yes, it was correct. Apart from the logic of your main asset being in Spanish, are there any advantages of being in missile in Spain? Did you consider jurisdiction like Netherlands, which I believe has better antihistoric take overs. Yes, we look at other jurisdictions and the main reason why not moving into UK was it would trigger a huge tax issue since it went out from Brexit. View to not being in Europe, it would basically, if you the interchange of shares and we even had a company called ATALAYA METLS created in The UK, it will be seen as selling shares of a European country like Cyprus and buying shares one by one in The UK. This created a potential tax liability or loss, but anyway, like you have to pay taxes at that moment without having to actually having buying or selling any shares, basically simply this change.

37:24 So, that really avoided the plan of UK, which was our original plan and best plan. Then we looked at other advantages. The problem here is that you really have to other places like Netherlands or other countries in Europe, you have to have a real presence in this country. So first of all, so in order to be eligible, you have to have offices, you have to have something there. So really, it made it very difficult in the case of Netherlands, although we had to be moving there and have a presence there. But probably, I believe it has certain anti hostile takeover measures, yes, and other advantage, but we decided that it was better to do it in Spain.

38:15 And this is what we are going to pass to our shareholders to vote. Of course, if the shareholders do not approve it, well, we will look at other options because we believe that the ultimate goal, which is going away from Cypress, is to be able to be included in the listing sorry, in the listing, in the index of the WUTSI. And and, sorry, Alberto, if I may add. I don't know if it's better or worse, but at the end of the day, we will have the anti hostile takeover measures as any other UK company will have by applying the UK city code. I I think this is the mine. So we're not gonna be in a in a different situation as any other UK entity. Would you agree the next question is, would you agree that there are advantages how to make and find an acquisition? ATALAYA MINING is very low and could make the company attractive to private equity, voucher funds or another corporate player who would use ATALAYA balance sheet to partially finance at the core.

39:12 I think, yes, you're correct. I mean, somebody asked me, and I was recently in The UK doing some marketing in out of London, that one of my worries was that our share price was low. And I said, look, this is the thing that really worried me, because eventually, we know that the market situation is tough and somebody could come with a very attractive offer and some funds will say, look, you know what, I'm tired and I will take this and whatever. It's not so easy. It's not so easy because of our concentration of shareholders. But of course, it can always happen. But I don't think this makes a difference of being in one place or the other.

39:59 We don't believe that's a problem. I also don't think that anyone would make an aggressive acquisition without having certain knowledge of the permitting, without being friendly with existing employees or shareholders will be very risky. I can tell you, and I'm happy to keep this recorded, that I would not accept to be bought by someone to simply keep it in private equity without trying to get the higher value for our shareholders, including me. So from that side, it's not the first time I have been subject to this and I'm very well known to, let's say, provide to work for my shareholders.

40:54 Another one is, I heard from some non accretive sources that there were some setback issues with Alex. Is everything on track? Well, I don't know what the word issues. I mean, things have taken longer than we expected due to the fact that LX is something new and Lain is developing this by themselves, which means they don't give this to a big engineering firm to do the whole thing. And this is really has delayed things, especially, for example, in summer, they could not get enough people to work in the final assembly. So in July sorry, in July or in September, simply they did not have enough people to put pipes, cables and so on. Right now, there are over 100% working inside that building. I was visiting that two days ago and I was very impressed.

41:46 But the proof will be coming soon before the end of the year or first weeks of January, we will announce production of first production from that side, even if we are still in the commissioning stage. So, think this is a huge success. The next question is background to question. According to McKinsey, a consulting firm, the electrification trend is expected to increase annual copper demand 36,000,000 tonnes by 31, with supply forecast to be around 30,000,000 tons from the current 22,000,000 creating a 6,500,000 tons deficit in the start of the next decade. Is this considering that I started to explore Rio Tinto? Obviously, what we produce today is potentially at a considerable discount to expected demand.

42:33 This is a good point because, I mean, somebody can ask, well, why don't we keep the grades there and use it later? Well, the thing is, the setback would be, okay, we will stop production and so our share price will go down immediately and wait until the prices come. But it could happen as history has shown us that there is a war and this price do not come for any reason or suddenly all the electric cars start exploding and suddenly the electrification is not there. So, then this would be a very risky business to bet in what's going to happen in the future. Having said that, this deficit is totally, I also believe so. And it's going to start anytime.

43:19 I mean, if the deficit is there, probably we'll start seeing prices that are elevated in 2024, 2025, very elevated. What I mean by elevated is prices could go to 15,000 tons, it would double, not at 20%, they could double easily in order to first incentivize production, new production and second, reduce demand from sources. So try to take substitution or simply make it so expensive that they will not happen. So at the end, the deficit has to be compensated some way. So look, what are we thinking? Well, I think this is it is being considered as part of the strategy right now, yes. We know that the pits can be deeper and we can extend our mine life beyond fifteen years. We know that the higher copper price will make deposits that otherwise would be lower grade like Vaca Muerta or like the deeper parts of San Benicio or the deeper parts of Terra Corrado will be not to be economic. So, have a plan that if this price is materialized, our reserves will be larger and we will be producing more.

44:30 And of course, this materializes as we expect the share price of ATALAYA will also go in a similar boom like copper price. But right now, what we are looking is looking at things to position ourselves in good metals, because at the end, the shares in a mining company are like options in the underlying commodity. And the longer life you have is the better value of the option. Another question, we have lots of questions today, is with your potential move to the main board, have your banking advisors identified what indexes you're likely to join?

45:16 I believe the the normal index, not so far, we don't have the the size to to join a larger index. So yeah. Let's have yeah. To add a little bit more color on that. So, yes, we we we have discussions with all bankers. And first, you need to be eligible as as I mentioned. And one of the condition is basically being to be selected in Spain. And and the second one, you need be the size. So as we don't qualify to have the size for a footy to a hundred and fifty, we will be included in their small business footy. And then once we get the size, which we could really have around 500,000,000 markup, once you get to around seven hundred, which I think we will at some point, we will qualify for the two fifty.

46:06 With your potential with our potential move to the main board in The UK, have any institutional investors indicated that this will enable them to add or initiate investments in ATALAYA? Yes. Actually, we have had investors in The UK saying that they were not allowed in their institutes to invest in AIM companies and they would be welcome to if we were in the main market. Likewise, there are other companies and institutions out of The UK that had the same reason. They could not invest if we were only aim listed. So yes, I think this would attract new investments without any question. The next question is, are UK corporate investors, CIPP investors, ISA investors to be subject to 10% withholding tax or any future dividend distributions by ATALAYA.

47:02 If the result into Spain, such withholding tax shall be recoverable not be recovered by said UK corporate investors, ICE investors and SIPP investors. Has ATALAYA considered this tax implication when ruling Messiah in Spain? Could you please go ahead, Fazer, with all the details? Yeah. So starting from the from the back from the from the end of the question, yes, we have considered the tax implications. And overall, we think that it it will be neutral for the majority of the shareholders, but regime will be slightly different. So by the by by definition, any nonresident shareholder need to be withholding tax at 19%, only you have a couple of conditions to basically be qualified not to be withhold.

47:54 One of these condition will be if you're in any other country of the European Union, and the second one, if you have above 5% of the company for a period longer than one year. Now if you don't qualify to those to those conditions, you might be subject to withhold of 19, which according to the double treated agreements between Spain and The UK, you will be able to basically deduct what you do your tax return in in The UK. So effectively so we have no way to impact your tax schemes, but we likely will need to withhold 19% from non president or let you have those qualifications. And that 90%, we will be able to break to provide you with a tax certificate, which you will be able to deduct from your tax returns due to your investigation.

48:46 Now I'm not a 100% familiar with the ATA investors or the Citi investor. I mean, I don't know how exactly that works in The UK. At the end of the day, if you need to tax that, and you have been withhold for 19%, then you will be able to deduct that 19% of the tax return you do when you're doing your investment through those tools. The next question is very similar to this one. Please advise the impact on taxation on dividends on the proposed resolution in ATALAYA in Spain. In particular, my reading is that Spain will withhold taxes of 19% or 24% of dividends. And for holders of stock in SIP and AISA, majority of individual holders, I expect, then none of these taxes are recoverable, clearly a major concern. Although, think Cesar has explained the possibility of offsetting those, but we don't know exactly the details of that.

49:42 Do we have an off taker for our LX product as yet or will have just sell to the market? Well, we don't have an official off taker, but we have received indications and people who have visited that both the zinc and copper products will be more at full value for companies in that are buying these materials from other places. The quality of the zinc and copper products are so far basically 100% assay or 99.99%. So, it should be enough to basically get 100% from the market. Next question is, how much will admission to the main market increase unit costs? Well, we have a very low overheads and I don't think this will be a big issue. So far, we don't see a big cost in anything major or any significant relevance except the more additional paperwork, but nothing nothing special that we can we can see.

50:50 I'm sorry. And the cost for the admission to the main market will not be qualified as a unique cost. Right? It's as a one off. And and and as I say, as we're raising funds, we're trying to minimize the cost to to do all the work. Can you explain how revenue and EBITDA are sequentially higher in Q3 compared to Q2 when sale volumes and realized copper prices were both lower than in Q2 and cash costs were higher than Q2. Can you reply for this, Cesar? Yes. Sure. And this is quite technical. Yes, indeed. We have we book it for $85,000,000 in Q3 and compared to 79,000,000 in q two in terms of revenue.

51:35 And but the the the main reason and and the and the realized price excluding q b, it's slightly lower in q three. But the main reason is for the open q b. So and this is not gas adjustment, but when you when you have some open QBs that you need to put mark to market in your p and l every time you do a hard closing, That adjustment was minus 6,000,000 in the previous quarter and was almost zero in in q three. So is so so get get addressing your question is is the way that you evaluate the mark to market the open QPs, and there is no other reason. And and that's why it works in a different in a different way. And it's just the way that the market price, the copper price has been moved in the in the last few quarters.

52:26 Well, the next question is, how do you expect the production and cost front for 2024? Well, we have not given guidance yet, but I expect it to be very similar to the previous year to this 2023. Next question is, today we reported a significant cost reduction in TCs and RCs for 2024. Are you expecting to benefit from this reduction in these charges? Yes, we are expecting to benefit from that because we are linked with the benchmarks. Having said that, in addition to that, we expect the next year to be able to sell some significant portion of our production to the local smelter, since this local smelter owned by Freeport is getting supplies from Indonesia and Indonesia is finally getting into production a new smelter, which means concentrates that were coming from Indonesia are not going to come to the smelter and our trucks pass in front of the smelter. So, very likely, we have been in discussion then that we will take a significant amount of production, which means not only we will benefit from the TCCRC that were marked for the benchmark for 2024, but also will benefit for a profit sharing of the savings of shipment costs to China, which are at least the same amount of the TCs in a normal year. So, we expect the next year in this side of selling cost will be better.

53:52 Next question, in the case of Toro, what will be the next key milestones considering there is support for mining project from the Junta? I think the key milestones will be the inclusion official inclusion of our project as a strategic project, which very likely will happen in the beginning of the year. And from that, they have a specific team they will have a specific team spotlighting the paperwork done by the Ashunta. And the next milestone will be the completion of the public information period, which we expect sometime in the first part of the year 2024. From there, it should be quite straightforward. But with permits, never know.

54:40 But I think the key milestone will be to the inclusion of our project as our strategic project, which we have been told verbally that it fulfills all the conditions and that we are going to be basically the first larger project to be included in this type of new law that's going to start in the January 1. Is there any risk to the mine plan if your permits of San Luis Obispo are delayed? What is the critical path of that deposit? San Luis Obispo is composed by two zones. The upper part is open pit and the lower part is underground. Both will be mined simultaneously to Lucero Corrado. So, whatever is not mined now will be mined later. So, the only thing is, as you know, San Luis contains higher grade and the sooner we get that higher grade, the better is from the net present value of the project.

55:31 With permits, we never know because it's subject to the authorities. We already have a permit for stripping and for doing some initial work, which right now we are doing already. And but they still need a much larger permit for the full footprint. What is the risk? The risk is delayed. We don't expect it not to be approved. Actually, it would be crazy that they give us the approval for an initial project and not give us the full project. And also, it will be crazy not to having given us the space for the tailings, 150,000,000 tons not to have the space not to have the ore to mine it. So, it will happen, but simply this bureaucracy and the critical path, I would say, is the periods of papers, stability, several things that are needed, which we'll expect it to happen sometime in the year. So far, we will continue with this smaller pit that we are doing right now.

56:28 And I would say, mid in the year, we'll be ready to go full steam. But as I say, it doesn't affect too much the whole overall picture, because we have the Cerro Corrado pit. In Cerro Corralo, we are assuming basically next year, we're mining minimum amount of material from San Dimitrios just to be conservative. Next question is, will there be a Spanish withholding tax on dividends after the headquarters move to Spain? I think this question has already been replied. Success in coarse particle recovery and primary sulfide leaching would add 2,000,000 tons to incremental supply in 2030. Thoughts on that? Well, coarse particle recovery gives a better recovery, but does not mean more copper coming on the stream.

57:15 What they talk about primarily sulfide leaching, basically in heap leach, they talk about extra 2,000,000 tons of supply. But this has been already going to for two or three years and especially with the system called Jetty. The reality is that the only place where it has been applied in KapStone Arizona, I have not seen any incremental production coming on that. I have to say that this thing what they call primary sulfur leaching and sulfides, it's heap leaching, which means you can extract things that are in dumps, but it's not just irrigating with acid, you need to have a liner to recollect that acid and you need to have idle capacity. So, it's not that simple to implement. It's easier to say than to implement. Yes, it may add some extra production, but I don't think that will be the change. Another thing is that these systems that they're talking, they increase, they improve the timing for recovering the copper from the ships from infinite, which means it's not leachable to years or not months, not hours to three years more or less.

58:22 So even if you start applying them now, you will not start seeing the benefit until in three years from now. Our system of Helix is totally different. You produce a concentrate and then you leach that concentrate and it's a matter of hours, not years or months. So I'm not so sure that this is going to be so fast. Another question is related to this. When do you expect to raise the first sales recoveries costs from Alex plant to the market? I would say after we commission this, which commission will let's say the first few months of the year '24, I would say mid second quarter or mid-twenty four is when we have results.

59:08 Obviously, before we'll be giving updates. Next question, the miscellation of what are the net profit, net cash flow implications to move the Cypress to Spain, concerned withholding tax and dividends, corporate tax increasing from 12% to 25%. Well, the first thing has already been discussed about withholding tax. And the corporate tax actually officially is 25%, but we are paying a little bit less than 20% due to certain things. But in addition to that, really at the end, the tax authorities in Spain consider the company as a profit here. So they're very careful not to think that the profits transfer of profits from here to Cyprus due to the regulation within the European Union.

1:00:01 So I don't think from that side, corporate tax will be a big difference. Yeah. And on top of that, Alberto, just to mention that some of the profit that we declared in Cyprus are related to intercompany loans, which will remain in Cypress. So so so so a company a financing company will fund intercompany subsidiaries, and and and, basically, that will also be continue paying 12.5 percent on on taxes as we have already an office and a structure there to basically organize that. So, not significant change there. Yes. Well, there is another question about how I move to The UK. Not move to UK? There's no withholding tax. Well, we have already said that The UK was our first choice, but there was a one off tax from the Spanish authorities. So it was quite a complicated situation.

1:00:59 Then with all the tax, another question, we have already discussed that. The next one is if ATALAYA do MASAD in Spain in the future, what's the effect on company shares tax free again, same thing. Given your high net cash position and how share price and low share price, will you consider a share buyback? Yes, we have been thinking that at the Board and we don't rule it off. Well, people say talk again about tax free investment wrappers, most common holding form in UK investors is SIPP, UK pensions. So, another question several questions about that.

1:01:50 Another one is the same thing, dividend tax, unfortunately, holders of ATALAYA will not be able to recover withholding tax on dividends. Can you look further? Does it put the authorities agree not to apply withholding tax on grounds of most UK holders held through SAP? I think we discussed that. Any traction from your investment in ESG? Can you compare your green credentials against other copper miners? Are you listed in any ESG index? You go through this? Yeah. So so yeah. So we we we have done so we've raised a small credit line recently, which was basically used for the solar plant, and we already have the benefit about better rates because that was for a purpose, which is included in the taxonomy of of the European Union. But, yes, we're doing a lot of work on the ESG front, and we're starting to see your ratings related to ESG improving, and we continue. And and I think we expect with the work that we've been been doing 20 to post ratings be even better, which, again, it's with an aim to have when we need to fund or raise funds for for total. And once we have the permit, we would be in a position to have all this work done, and we'll be able to get benefit out of this better rate. But, yes, we we've been rated by the most significant rating company on the sustainability,

1:03:20 and and we're proving since we got the the last one a few years back. Perfect. That's great, Alberto, S. A. Thank you for update for being so generous with your time today and addressing every question there. Of course, the company can review all questions submitted today, and we will publish those responses on the investment company platform where appropriate to do so. But before we direct investors to provide you with their feedback, which one is particularly important to the company, Alorto, could I please ask you for a few closing comments? Well, again, thank you very much for attending. It's a long time. Thank you very much for sending so many questions. And of course, for those of you feel free to any of you, feel free to send any question to our addresses and we'll take the time to reply as soon as we can. So thank you very much for your continued support. It helps us a lot and we look forward to a fantastic year.

1:04:20 Thank you very much. Alberto Cesar, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the team 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 the management team of ATALAYA MINING PLC, we'd like to thank you for attending today's presentation, and good afternoon to you. Thank you.