Atalaya Mining Q2 Earnings Call Highlights

Atalaya Mining (LON:ATYM) reported a stronger second quarter and first half of 2026, supported by improved production following weather-related disruptions earlier in the year, higher copper prices, silver credits and lower treatment charges.

Chief Executive Officer Alberto Lavandeira said the company produced 13,500 tonnes of copper in the second quarter at all-in sustaining costs of $2.79 per pound. The result followed unusually heavy rainfall in southern Spain during late January and most of February, which affected first-quarter operations. During the second quarter, operations normalized, with mill performance improving, copper grades approaching 0.4% and recoveries reaching 84%.

“It was a good quarter,” Lavandeira said, adding that the company is maintaining its full-year production and cost guidance despite expecting production to finish toward the lower end of its target range.

Record EBITDA, Free Cash Flow and Net Cash

Atalaya reported quarterly EBITDA of €78 million and first-half EBITDA of €126 million, both records according to management. Quarterly operating cash flow was nearly €80 million, while free cash flow totaled €58 million.

Lavandeira attributed the financial performance to higher copper prices, stronger silver grades and lower offsite costs, including treatment charges. He said that higher mining and processing costs related to diesel, explosives, inflation and currency movements were largely offset by silver credits and favorable treatment-charge conditions.

Cash costs were approximately $2.40 per pound in both the second quarter and first half, while all-in sustaining costs were about $2.80 per pound in the quarter and just under $3.00 per pound for the first half, management said.

The company ended the quarter with a net cash position of nearly €319 million, which Lavandeira described as a new record. Atalaya’s board declared an interim dividend of €0.055 per share, around 25% higher than the prior-year interim dividend. The payment is expected in September.

Atalaya’s dividend policy is to return between 35% and 50% of free cash flow to shareholders, although management said it also expects to fund a series of growth investments at its Spanish operations and at the Touro project.

Capital Spending Adjusted as Projects Move Later

Management lowered planned capital expenditures for 2026 by approximately €20 million, citing delays to work at San Dionisio, including stripping activity, road relocation and the start of a ramp. Lavandeira said the reduction represents a deferral rather than a saving, with some spending shifting into later periods and 2027.

An electric line currently limits access to higher-grade material at San Dionisio. The line’s owner, Endesa, has contracted its removal, and Atalaya expects it will be able to access the area shortly after that work is completed. Lavandeira said a meaningful contribution from the higher-grade material could occur in the fourth quarter or early 2027.

At the processing plant, Atalaya expects throughput to remain at the high end of 16 million tonnes or above, despite planned third-quarter maintenance. The company expects slightly lower grades than previously anticipated, offset by somewhat improved recoveries. Lavandeira noted that the mill recorded only three hours of downtime during May.

Growth Projects Focus on Masa Valverde, Polymetallic Circuit and Touro

At Masa Valverde, Atalaya has continued surface preparations including access roads, an explosives magazine, portal preparations and platforms. A board decision on advancing the ramp is expected in August or September, management said. Once approved, the ramp could take roughly two-and-a-half years to complete, with potential ore access after about two years. Copper production from the project is expected in approximately two-and-a-half to three years.

Lavandeira said Masa Valverde’s copper zone contains grades between 1.5% and 2% copper. The company plans to prioritize the copper zone before considering polymetallic material, unless its processing circuit is ready to handle lead and zinc-bearing ore.

Atalaya is also advancing engineering work to enable its Riotinto plant to process polymetallic material and produce lead and zinc concentrates in addition to copper concentrate. A preliminary estimate put capital expenditure for the project at €88 million, including finer grinding capacity, zinc and lead circuits, and filters. Management is evaluating ways to reduce that figure by using excess grinding capacity.

The circuit is not essential in the near term, Lavandeira said, but could improve operating flexibility by allowing the company to blend material from future underground and open-pit sources. Management aims to have the circuit available in about one-and-a-half years, if possible.

• Potential polymetallic feed sources include San Dionisio, San Antonio and Masa Valverde.
• Atalaya is conducting geotechnical work to optimize the San Dionisio open pit and maximize open-pit extraction.
• The company expects to update its 2023 preliminary economic assessment for polymetallic development next year.

Atalaya is also testing the recovery of pyrite concentrate from tailings, citing market interest related to expected sulfuric acid shortages. Separately, its E-LIX facility has operated continuously for about 100 days, according to Lavandeira, though at a small scale of roughly 3 to 4 tonnes per hour. The company said the process is working and breaking even, but uncertainty remains around recovering assets associated with E-LIX following an impairment recorded earlier in the year.

Touro Permit Still Awaited

At Touro, management said it continues to await the environmental impact declaration. Lavandeira said all reports have been positive and that civil servants are preparing the final declaration, but he could not provide a firm timing because the process is outside the company’s control.

Atalaya has completed geotechnical studies at the planned plant and tailings sites and said it is prepared to move forward when permits are received. The company expects construction to take about 18 months and plans to order major long-lead equipment, including the gyratory crusher, SAG mill, ball mill, flotation equipment and filters, after receiving the environmental approval.

Looking further ahead, Lavandeira said Atalaya’s project pipeline could take production to about 100,000 tonnes of copper equivalent, driven principally by Touro, higher-grade output from Masa Valverde and the addition of lead-zinc concentrate production at Riotinto.

About Atalaya Mining (LON:ATYM)

Atalaya is a European copper producer that owns and operates the Proyecto Riotinto complex in southwest Spain. Atalaya's shares trade on the London Stock Exchange's Main Market under the symbol "ATYM". Atalaya's operations include the Cerro Colorado open pit mine and a modern 15 Mtpa processing plant, which has the potential to become a central processing hub for ore sourced from its wholly owned regional projects around Riotinto, such as Proyecto Masa Valverde and Proyecto Riotinto East. In addition, Atalaya has a phased earn-in agreement for up to 80% ownership of Cobre San Rafael S.L., which fully owns the Proyecto Touro brownfield copper project in the northwest of Spain, as well as a 99.9% interest in Proyecto Ossa Morena.

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