ATYM Atalaya Mining Plc

ATALAYA MINING PLC

MANAGEMENT'S REVIEW AND

UNAUDITED INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

30 June 2024

Management review report

Notice to Reader

The accompanying unaudited interim condensed consolidated financial statements of Atalaya Mining Plc have been prepared by and are the responsibility of Atalaya Mining Plc's management.

Introduction

This report provides an overview and analysis of the financial results of operations of Atalaya Mining Plc and its subsidiaries ("Atalaya" and/or "Group"), to enable the reader to assess material changes in the financial position between 31 December 2023 and 30 June 2024 and results of operations for the three and six months ended 30 June 2024 and 2023.

This report has been prepared as of 13 August 2024. The analysis hereby included is intended to supplement and complement the unaudited interim condensed consolidated financial statements and notes thereto ("Financial Statements") as at and for the period ended 30 June 2024. The reader should review the Financial Statements in conjunction with the review of this report and with the audited, consolidated financial statements for the year ended 31 December 2023, and the audited interim condensed consolidated financial statements for the period ended 30 June 2023. These documents can be found on Atalaya's website at www.atalayamining.com

Atalaya prepares its Annual Financial Statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) and the interpretations of the IFRS Interpretations Committee (IFRS IC) approved by Regulations of the European Commission, and its Unaudited Interim Condensed Consolidated Financial Statements in accordance with International Accounting Standard 34: Interim Financial Reporting. The currency referred to in this document is the Euro, unless otherwise specified.

Forward-looking statements

This report may include certain "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitute forward-looking statements. Forward-looking statements are frequently characterised by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Assumptions upon which such forward-looking statements are based include that all required third party regulatory and governmental approvals will be obtained. Many of these assumptions are based on factors and events that are not within the control of Atalaya and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in this report and other documents filed with the applicable securities regulatory authorities. Although Atalaya has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Atalaya undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

1.      Incorporation and description of the Business

Atalaya Mining Plc (the "Company") was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered office is at 1 Lampousa Street, Nicosia, Cyprus.

The Company was first listed on the Alternative Investment Market (AIM) of the London Stock Exchange in May 2005, trading under the symbol ATYM. On 29 April 2024, the Company was admitted to trading on the main market of the London Stock Exchange.

Atalaya is a European mining and development company. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in Spain, elsewhere in Europe and Latin America.

The Group has interests in four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group has an earn-in agreement to acquire two investigation permits at Proyecto Riotinto East.

Proyecto Riotinto

The Company owns and operates through a wholly owned subsidiary, "Proyecto Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the Andalusia region of Spain, approximately 65 km northwest of Seville. A brownfield expansion of this mine was completed in 2019 and successfully commissioned by Q1 2020.

Proyecto Touro

The Group has an initial 10% stake in Cobre San Rafael, S.L., the owner of Proyecto Touro, as part of an earn-in agreement which will enable the Group to acquire up to 80% of Cobre San Rafael, S.L. Proyecto Touro is located in Galicia, north-west Spain. Proyecto Touro is currently in the permitting process.

In November 2019, Atalaya executed the option to acquire 12.5% of Explotaciones Gallegas del Cobre, S.L. the exploration property around Touro, with known additional resources, which will provide further optionality to Proyecto Touro.

Proyecto Masa Valverde

On 21 October 2020, the Company announced that it entered into a definitive purchase agreement to acquire 100% of the shares of Cambridge Mineria España, S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which fully owns the Masa Valverde polymetallic project located in Huelva (Spain). Under the terms of the agreement Atalaya will make an aggregate €1.4 million cash payment in two instalments of approximately the same amount. The first payment of €0.7m was executed in January 2024 once the permits were granted. The second and final payment will be settled when first production is achieved from the concession.

In November 2023, the exploitation permit for the Masa Valverde and Majadales deposits was officially granted.

Proyecto Ossa Morena

In December 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owns 9 investigation permits. The acquisition also provided a 100% interest in three investigation permits that are also located along the Ossa- Morena Metallogenic Belt. In Q3 2022, Atalaya increased its ownership interest in POM to 99.9%, up from 51%, following completion of a capital increase that will fund exploration activities. During 2022 Atalaya rejected 8 investigation permits.

Atalaya will pay a total of €2.5 million in cash in three instalments and grant a 1% net smelter return ("NSR") royalty over all acquired permits. The first payment of €0.5 million will be made following execution of the purchase agreement. The second and third instalments of €1 million each will be made once the environmental impact statement ("EIS") and the final mining permits for any project within any of the investigation permits acquired under the Transaction are secured.

Proyecto Riotinto East

In December 2020, Atalaya entered into a Memorandum of Understanding with a local private Spanish company to acquire a 100% beneficial interest in two investigation permits (known as Peñas Blancas and Cerro Negro investigation permits), which are located immediately to the east of Proyecto Riotinto.

2.      Overview of Operational Results

Proyecto Riotinto

The following table presents a summarised statement of operations of Proyecto Riotinto for the three and six months ended 30 June 2024 and 2023, respectively.

(1)   Represents the Cerro Colorado pit only.

(*) Refer Section 5 of this Management Review.

There may be slight differences between the numbers in the above table and the preliminary figures announced in the quarterly operations updates that are available on Atalaya's website at www.atalayamining.com

(1)   For the Cerro Colorado pit only.

Note: Some figures may not add up due to rounding.

Three months operational review

The plant processed ore of 4.1 million tonnes during Q2 2024 (Q2 2023: 4.1 million tonnes), compared with 3.7 million tonnes in Q1 2024, which represents plant performance above its 15 million tonne per annum nameplate capacity.

Copper grade was 0.33% in Q2 2024 (Q2 2023: 0.40%), compared with 0.34% in Q1 2024, as a result of pit sequencing. Improved grades are expected in H2 2024 as mining returns to the bottom of the Cerro Colorado pit.

Copper recoveries in Q2 2024 were 85.81% (Q2 2023: 87.18%), compared with 84.74% in Q1 2024, as a result of favourable ore characteristics during the period.

Copper production was 11,583 tonnes in Q2 2024 (Q2 2023: 14,212 tonnes), compared with 10,666 tonnes in Q1 2024.

On-site copper concentrate inventories as of 30 June 2024 were approximately 8,749 tonnes (31 March 2024: 8,283 tonnes). All concentrate in stock at the beginning of the period was delivered to the port of Huelva.

Copper contained in concentrates sold was 11,397 tonnes in Q2 2024 compared with 12,858 tonnes in Q2 2023.

Six months operational review

Production of copper contained in concentrate during H1 2024 was 22,249 tonnes, compared with 26,351 tonnes in the same period of 2023. Lower production was mainly the result of lower grades and recoveries. Payable copper in concentrates was 21,116 tonnes compared with 25,095 tonnes of payable copper in H1 2023.

Ore mined in H1 2024 was 7.5 million tonnes compared with 7.4 million tonnes during H1 2023. Ore processed was 7.8 million tonnes versus 7.8 million tonnes in H1 2023, although lower grade stockpiles were processed in H1 2024.

Ore grade during H1 2024 was 0.33% Cu compared with 0.39% Cu in H1 2023. Copper recovery was 85.30% versus 87.04% in H1 2023. Concentrate production amounted to 113,308 tonnes below H1 2023 production of 125,600 tonnes.

3.      Outlook

The forward-looking information contained in this section is subject to the risk factors and assumptions contained in the cautionary statement on forward-looking statements included in the Basis of Reporting. Should the Company consider the current guidance no longer achievable, then the Company will provide a further update.

Operational guidance

Proyecto Riotinto operational guidance for 2024 is as follows:

Production

Copper production guidance remains at 45,000 - 50,000 tonnes. The Company continues to expect improved grades in H2 2024 as well as strong plant performance.

Operating Costs

Operating cost guidance for FY2024 remains at a cash cost range of $2.80 - 3.00/lb copper payable and an AISC range of $3.00 - 3.20/lb copper payable. AISC excludes one-off investments in the tailings dam (consistent with prior reporting) and waste stripping at the San Dionisio area, which are included in capital expenditure guidance below.

Capital Expenditures

Non-sustaining capital expenditure guidance for FY2024 remains at €64 - 73 million.

Exploration

Atalaya's exploration guidance for FY2024 is unchanged at €5 - 7 million.

4.      Overview of the Financial Results

The following table presents summarised consolidated income statements for the three and six months ended 30 June 2024, with comparatives for the three and six months ended 30 June 2023, respectively.

Three months financial review

Revenues for the three-month period ended 30 June 2024 amounted to €92.2 million (Q2 2023: €78.2 million). Higher revenues compared with the prior year quarter were mainly due to higher realised prices partly offset by lower concentrate sales. In addition, there was an increase in silver credits and lower penalty charges.

Realised prices excluding QPs were US$4.54/lb copper during Q2 2024 compared with US$3.81/lb copper in Q2 2023. The realised price during the quarter, including QPs, was approximately US$4.13/lb.

Cost of sales for the three-month period ended 30 June 2024 amounted to €60.2 million, compared with €56.8 million in Q2 2023. Unit operating costs in Q2 2024 were higher than in Q2 2023 mainly due to the increase of stripping ratio resulting from the update of reserves estimate, coupled with a lower capitalisation cost.

Cash costs of US$2.88/lb payable copper during Q2 2024 compared with US$2.60/lb payable copper in the same period last year. Higher cash costs were mainly driven by lower copper production in the quarter despite of a slightly stronger US Dollar/Euro exchange rate compared with Q2 2023. AISC for Q2 2024, excluding one-off investments in the tailings dam and San Dionisio stripping, were US$3.20lb payable copper compared with US$2.89/lb payable copper in Q2 2023.

Sustaining capex for Q2 2024 amounted to €1.1 million compared with €1.1 million in Q2 2023. Sustaining capex mainly related to continuous enhancements in the processing systems of the plant. In addition, the Company invested €4.4 million in the project to increase the tailings dam during Q2 2024 (Q2 2023: €3.5 million). Stripping costs capitalised for Cerro Colorado during Q2 2024 amounted to €1.3 million (Q2 2023: €2.7 million).

Capex associated with the construction of the 50 MW solar plant amounted to €1.9 million in Q2 2024 (Q2 2023: €2.8 million), while investments in the E-LIX Phase I plant totalled €0.2 million (Q2 2023: €5.0 million). Additionally, capex of €8.0 million was related to the San Dionisio area.

Administrative and other expenses amounted to €3.2 million (Q2 2023: €3.6 million) and include non-operating costs of the Cyprus office, corporate legal and consultancy costs, ongoing listing costs, officers and directors' emoluments, and salaries and related costs of the corporate office.

Exploration costs on Atalaya's projects portfolio for the three-month period ended 30 June 2024 amounted to €1.1 million compared to €2.1 million in Q2 2023, mainly because increased costs incurred during the period in Proyecto Masa Valverde were capitalised rather than expensed.

EBITDA for the three months ended 30 June 2024 amounted to €26.4 million compared with Q2 2023 of €15.7 million.

The main item below the EBITDA line is depreciation and amortisation of €11.0 million (Q2 2023: €9.4 million).

Net foreign exchange differences had a positive impact due to the stronger US Dollar/Euro rate at the end of Q2 2024 compared to the beginning of the quarter.

Net financing costs for Q2 2024 were negative €1k compared to €3.5 million in Q2 2023. This difference is driven primarily by the fact that Q2 2023 interest income included €3.8 million received from the agreement reached with Astor in May 2023.

Six months financial review

Revenues for the six-month period ended 30 June 2024 amounted to €162.1 million (H1 2023: €169.4 million). The decrease in revenues was predominantly due to a reduction in the volume of concentrate sold despite higher realised copper prices.

Copper concentrate production during the six-month period ended 30 June 2024 was 113,308 tonnes (H1 2023: 125,600 tonnes) with 111,281 tonnes of copper concentrates sold in the period (H1 2023: 122,040 tonnes). Lower copper ore grades and lower recoveries were the main drivers of the production decline in H1 2024. Inventories of concentrates as at the reporting date were 8,749 tonnes (31 Dec 2023: 6,722 tonnes).

Realised copper prices, excluding QPs, for H1 2024 were US$4.26/lb copper compared with US$3.90/lb copper in the same period of 2023. The Company did not enter into any hedging agreements in 2024.

Cost of sales for the six-month period ended 30 June 2024 amounted to €117.0 million, compared with €119.8 million in H1 2023. Lower operating costs in 2024 were primarily due to a reduction in input costs compared with the 2023 period. This was mainly driven by lower electricity prices in the market and lower consumption and prices of steel.

Cash costs of US$2.93/lb payable copper during H1 2024 compare with US$2.73/lb payable copper in the same period last year. Higher cash costs were mainly driven by reduced payable copper production during the period, despite a decrease in operating costs. AISC excluding investment in the tailings dam and the waste stripping at the San Dionisio area in the six-month period were US$3.19/lb payable copper compared with US$3.00/lb payable copper in H1 2023. The increase was primarily due to higher cash costs.

Sustaining capex for the six-month period ended 30 June 2024 amounted to €1.5 million, compared with €1.5 million in the same period the previous year. Sustaining capex related to enhancements in processing systems of the plant. In addition, the Company invested €7.5 million in the project to increase the tailings dam, compared with €6.9 million in 2023.

Capex associated with the construction of the 50 MW solar plant amounted to €2.6 million in H1 2024 (€4.5 million in H1 2023), with a total investment in the project of €35.3 million, while investments in the E-LIX Phase I plant totalled €6.5 million (€8.4 million in H1 2023). Additionally, capex of €16.2 million was related to the San Dionisio area.

Corporate costs for the first six-month period ended June 2024 were €5.2 million, compared with €5.6 million in H1 2023. Corporate costs mainly include the Company's overhead expenses.

Exploration costs related to Atalaya's project portfolio for the six-month period ended 30 June 2024 and amounted to €1.9 million, compared with €3.6 million, mainly as a result of higher capitalised costs incurred during the period in Proyecto Masa Valverde.

EBITDA for the six months ended 30 June 2024 amounted to €36.7 million, compared with €40.1 million in H1 2023.

Depreciation and amortisation amounted to €20.6 million for the six-month period ended 30 June 2024 (H1 2023: €18.2 million).

Net foreign exchange gains amounted to €2.2 million in H1 2024 (€55k in H1 2023).

Net finance costs for H1 2024 amounted to €0.1 million (H1 2023 positive €2.6 million).

Copper prices

The average realised copper price (excluding QPs) increased by 19% to US$4.54/lb in Q2 2024, from US$3.81/lb in Q2 2023.

The average prices of copper for the three and six month period ended 30 June 2024 and 2023 are summarised below:

Realised copper prices for the reporting period noted above have been calculated using payable copper and excluding both provisional invoices and final settlements of quotation periods ("QPs") together. The realised price during Q2 2024, including the QP, was approximately $4.13/lb.

5.      Non-GAAP Measures

Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost per pound of payable copper", "All-In Sustaining Costs" ("AISC") "realised prices" and "Net Cash/Debt" in this report. Non-IFRS measures do not have any standardised meaning prescribed under IFRS, and therefore they may not be comparable to similar measures presented by other companies. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for indicators prepared in accordance with IFRS.

EBITDA includes gross sales net of penalties and discounts and all operating costs, excluding finance, tax, impairment, depreciation and amortisation expenses.

Working capital is the difference between current assets and current liabilities.

Cash Cost per pound of payable copper includes cash operating costs, including treatment and refining charges ("TC/RC"), freight and distribution costs net of by-product credits. Cash Cost per pound of payable copper is consistent with the widely accepted industry standard established by Wood Mackenzie and is also known as the C1 cash cost.

AISC per pound of payable copper includes C1 Cash Costs plus royalties and agency fees, expenditures on rehabilitation, capitalised stripping costs, exploration and geology costs, corporate costs and recurring sustaining capital expenditures but excludes one-off sustaining capital projects, such as the tailings dam project.

Realised price per pound of payable copper is the value of the copper payable included in the concentrate produced including the discounts and other features governed by the offtake agreements of the Group and all discounts or premiums provided in commodity hedge agreements with financial institutions if any, expressed in USD per pound of payable copper. Realised prices do not include period end mark to market adjustments in respect of provisional pricing Realised price is consistent with the widely accepted industry standard definition.

6.      Liquidity and Capital Resources

Atalaya monitors factors that could impact its liquidity as part of Atalaya's overall capital management strategy. Factors that are monitored include, but are not limited to, the market price of copper, foreign currency rates, production levels, operating costs, capital and administrative costs.

The following is a summary of Atalaya's cash position and cash flows as at 30 June 2024 and 31 December 2023.

Liquidity information

⁽¹⁾  Includes borrowings

⁽²⁾ Net cash has been restated from the amount previously reported in the Company's Q2 Operations Update of €30.0 million

Unrestricted cash and cash equivalents (which include cash at both Group level and Operation level) as at 30 June 2024 decreased to €81.0 million from €121.0 million at 31 December 2023. The decrease in cash was mainly due to investments and repayment of financing which offset cash inflows from operations. Specifically, investments resulted from capital expenditure in the San Dionisio area, and higher financing outflows due to the repayment of operating facilities. Cash balances are unrestricted and include balances at operational and corporate level.

As of 30 June 2024, Atalaya reported a working capital surplus of €63.4 million, compared with a working capital surplus of €68.6 million at 31 December 2023. The decrease in working capital mainly resulted from the repayment of current payables.

Overview of the Group's cash flows

Three months cash flows review

Total net cash outflow for the period was €5.8 million during the three months ended 30 June 2024. This was due to the net results of cash from operating activities amounting to €30.1 million, the cash used in investing activities amounting to €17.1 million, the cash used in financing activities totalling €18.9 million.

Cash generated from operating activities before working capital changes was €26.8 million. Atalaya's trade receivables in the period decreased by €2.7 million, its inventory levels increased by €2.6 million and its trade payables increased by €3.7 million.

Investing activities during the quarter consumed €17.1 million, relating mainly to the tailings dams project, E-LIX, San Dionisio area and continuous enhancements in the processing systems of the plant.

Financing activities during the quarter resulted in cash outflows of €18.9 million primarily due to repayments of existing unsecured credit facilities.

Six months cash flows review

Total net cash outflow for the period was €42.2 million during the six months ended 30 June 2023. This was due to cash from operating activities amounting to €28.4 million, cash used in investing activities amounting to €34.9 million, cash used in financing activities amounting to €35.7 million.

Cash generated from operating activities before working capital changes was €38.3 million. Atalaya decreased its trade payables in the period by €2.5 million, increased its inventory levels by €4.8 million and decreased its trade receivable balances by €5k.

Investing activities during the six-month period decreased cash by €34.9 million, with the majority of funds directed towards the tailings dams project, E-LIX, San Dionisio area and continuous enhancements in the processing systems of the plant.

Financing activities during the six-month period ended 30 June 2024 resulted in cash outflows of €35.7 million due to the repayment of unsecured credit facilities.

Foreign exchange

Foreign exchange rate movements can have a significant effect on Atalaya's operations, financial position and results. Atalaya's sales are denominated in U.S. dollars ("USD"), while Atalaya's operating expenses, income taxes and other expenses are mainly denominated in Euros ("EUR") which is the functional currency of the Group, and to a much lesser extent in British Pounds ("GBP").

Accordingly, fluctuations in the exchange rates can potentially impact the results of operations and carrying value of assets and liabilities on the balance sheet.

During the three and six months ended 30 June 2024, Atalaya recognised a foreign exchange profit of €0.7 million and €2.2 million, respectively. Foreign exchange profits mainly related to changes in the period in EUR and USD conversion rates, as all sales are cashed and occasionally held in USD.

The following table summarises the movement in key currencies versus the EUR:

7.      Sustainability

Corporate Social Responsibility

For the second quarter of 2024, Atalaya has continued its social investment through Fundación Atalaya, implementing a new series of actions to support social entities in the Cuenca Minera region and maintaining its agreements with the councils near the mining operation.

Fundación Atalaya has assisted several municipalities with clearing undergrowth in the areas surrounding the mine. Due to a lack of employees and the high fire risk from elevated temperatures, these tasks had become unmanageable for the councils.

Additionally, Fundación Atalaya supported the XX Cultural Week 'Adela Frigolet' held in Nerva and the II Poetry Contest in Riotinto. During this quarter, Fundación Atalaya sponsored Samuel Delgado, a local disabled athlete, and supported the San Antonio festivity, celebrated just 100 metres from the mine.

Moreover, Fundación Atalaya has been working to bring and prepare a vehicle that will enable tourists to visit the mining operation. This special bus is the cornerstone of the Riotinto Xperience, an initiative by Fundación Atalaya in collaboration with Fundación Río Tinto. Alongside the vehicle, Fundación Atalaya has completed a room inside the Mining Museum of Riotinto to welcome and prepare tourists for the mine visit. This room features a 9-metre-long screen that will show a short documentary on the importance of copper to humanity.

Another significant initiative by Fundación Atalaya was the Mining Operator Course. This is the final part of the fourth edition of the course, which has helped many people from the Cuenca Minera region find employment.

Health and Safety

Accident Statistics:

The safety performance for the second quarter of 2024 has significantly improved compared to the same period last year. There were no lost-time accidents during this period, and the cumulative value up to June is 57% better than in the same period last year, for both employees and contractors. Consequently, the reference indicators for accident rates, the frequency index (FI) and severity index (SI), have reached 2.48 and 0.07, respectively, comfortably meeting the annual targets for these indicators.

Industrial Hygiene Measurements:

All planned actions for industrial hygiene were completed in the second quarter. The first intervention brigade received annual training in extrication, high-angle rescue, and the use of self-contained breathing apparatus.

Ergonomic Risk Assessments:

This quarter saw the start of ergonomic risk assessments, which yielded positive results regarding the evaluation of ergonomic factors for all job positions, including manual handling of loads, forced postures, and repetitive movements. Additionally, the review of risk assessments for jobs and workplaces, planned for 2024, was initiated.

Safety and Health Committee:

The second annual meeting of the Safety and Health Committee, a joint consultation and participation meeting with workers' representatives, was held. The requirements of the Labour Inspectorate were also addressed.

Daño Cero Project:

Phase I of the Daño Cero project was completed this quarter, using AI to process and analyse information collected from surveys to improve safety at the Atalaya Riotinto Minera facilities. With a 98% participation rate, there was total involvement from both in-house personnel and partner companies in this project. The results were presented to the participants and department heads.

Audits and Controls:

In May, the occupational health and safety system underwent an internal audit as part of the integrated management system. Furthermore, controls for psychoactive substances continued at access points and in the medical centre.

Environment

During the second quarter of 2024, the environmental department continued its efforts in environmental monitoring and natural environment management. Key points of the quarter include:

‒      Environmental Incidents: Two environmental incidents were recorded, both related to spills on unpaved areas. The affected areas were cleaned, and the waste was properly managed.

‒      Rainfall Data: A total of 38.7 litres per square metre of rainfall was recorded in Q2 2024, approximately 41% less than the same period in the previous year. For the hydrological year (hydrological year is between October 2023 and September 2024), total rainfall reached 826 litres per square metre, which is 104% more than the previous hydrological year.

‒      Environmental Permit Modification: On June 4th, documents for the new substantial modification of the AAU (Environmental Permit) due to the San Dionisio pit expansions were submitted. The Project for Exploitation and its Restoration Plan were submitted in May and are currently awaiting public hearing.

‒      Mine Waste Rock Facility: In April, the extension of the Mine Waste Rock Facility was granted as a non-substantial modification of the AAU.

‒      Dust Control Measures: Additional measures in the action plan against dust continued to be implemented, including intensified periodic irrigation, new coordination measures, and exhaustive monitoring of emissions generated by the operation.

‒      Fire Prevention Plan: The Fire Prevention Plan was executed during this quarter.

‒      Restoration Plan: The Environmental Department continued working on the Restoration Plan for both operational and historical areas.

‒      Emission Controls: All regular internal controls of diffuse atmospheric emissions were conducted, with results within limit values. In April, the annual mandatory external control of diffuse and point (channelled) emissions was carried out without incidents, meeting all limits. Other periodic and mandatory controls were also completed without incidents. Additionally, several reports were submitted to the administration bodies.

‒      Environmental Inspections: Daily inspections were conducted, primarily focusing on chemical storage and handling, housekeeping, waste management, uncontrolled releases, and environmentally friendly practices by Atalaya Riotinto Minera SLU and contractor personnel. Dust control and drainage system inspections were also performed regularly. A total of 90 inspections were carried out during the second quarter, covering the plant, mine area, and contractor camps.

8.      Risk Factors

Due to the nature of Atalaya's business in the mining industry, the Group is subject to various risks that could materially impact the future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to Atalaya. Readers are encouraged to read and consider the risk factors detailed in Atalaya's audited, consolidated financial statements for the year ended 31 December 2023.

The Company continues to monitor the principal risks and uncertainties that could materially impact the Company's results and operations, including the areas of increasing uncertainty such as the impact of macro-economic uncertainty on the business and geopolitical developments.

9.      Critical accounting policies, estimates, judgements, assumptions and accounting changes

The preparation of Atalaya's Financial Statements in accordance with IFRS requires management to make estimates, judgements and assumptions that affect amounts reported in the Financial Statements and accompanying notes. There is a full discussion and description of Atalaya's critical accounting policies in the audited consolidated financial statements for the year ended 31 December 2023.

Update in Ore Reserves and Its Financial Impact

In May 2024, Atalaya incorporated an update of its ore reserves based on an independent expert analysis in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council (the "CIM Standards"). This update has some impact on our financial statements and accounting estimates and reflects a revised understanding of the economic potential and operational requirements of our mining assets.

Further details are given in Note 2.4 to the Unaudited Interim Condensed Consolidated Financial Statements.

10.   Other Information

Additional information about Atalaya Mining Plc. is available at www.atalayamining.com

Unaudited interim condensed consolidated financial statements on subsequent pages.

By Order of the Board of Directors,

Neil Gregson

Chairman

Nicosia, 13 August 2024