TIDMATYM
RNS Number : 9876C
Atalaya Mining PLC
24 June 2021
The following amendment has been made to the Update on Cerro
Colorado Reserves and Riotinto District Resource Expansion
Initiatives announcement, released on 24 June 2021 at 07:00 am
under RNS Number 9221C .
The values in the Cu (%) column in the table outlining the
'Internal resource summary of San Dionisio constrained by the
US$3.50/lb Cu Pit' have been updated. All other details remain
unchanged.
24 June 2021
Atalaya Mining Plc.
("Atalaya" or "the Company")
Update on Cerro Colorado Reserves and Riotinto District Resource
Expansion Initiatives
Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to report a
new independent reserve estimate for its Cerro Colorado open pit at
Proyecto Riotinto in addition to a management update on several
ongoing resource expansion initiatives in the wider Riotinto
District in south west Spain, which have the potential to expand
production, extend the mine life and create near term value. The
Company will now begin the process of preparing an NI 43-101 report
incorporating Cerro Colorado and the wider Riotinto District.
A version of this announcement containing all referenced maps
can be found on the Company's website at www.atalayamining.com (the
"Website Announcement").
Highlights
Cerro Colorado open pit reserve update
-- New CIM compliant independent reserve estimate confirms
status as a long-life open pit copper mine.
-- Proven and Probable mineral reserves of 186 Mt at 0.38% Cu
with contained copper of approximately 702,000 tonnes (using a
0.16% Cu cut-off).
-- Mine life of over 12 years based on nameplate capacity of recently expanded 15 Mtpa mill.
-- Performance over recent quarters has demonstrated an ability
to operate at approximately 16 Mtpa creating the opportunity to
maximise life-of-mine value by supplementing plant feed with ore
sourced from regional deposits in the Iberian Pyrite Belt.
San Dionisio deposit
-- Based on preliminary internal estimates, this high grade
copper and polymetallic deposit located on the west side of the
Cerro Colorado pit, could potentially provide feedstock to
Atalaya's existing 15 Mtpa mill in the future.
-- Historical mining concentrated mostly on the high grade
polymetallic massive sulphides and high grade deep copper stockwork
leaving substantial resources unmined.
-- Open pit mining potential for remaining copper stockwork
resources as well as polymetallic massive sulphides.
-- Historical database, consisting of 65,745 metres of drilling
from 970 core holes plus detailed records of underground mapping,
provides excellent understanding of the resource. Drilling carried
out by Atalaya between 2017 and 2019 confirmed the extent and
grades of the residual mineralised resources.
-- Preliminary CIM compliant internal management estimates,
indicate that San Dionisio could host:
o A potential open pit mineable resource of approximately 52 Mt
at 0.7% Cu and 0.9% Zn with a strip ratio of 3.8;
o Additional 18 Mt at 0.7% Cu and 2.2% Zn with potential for
underground mining;
o Combined, these represent a potential total mineable contained
resource of approximately 500,000 tonnes of Cu and 869,000 tonnes
of Zn (rounded).
-- Next steps during 2021 will include the preparation of a NI
43-101 compliant resource estimate as well as initiating both a
fast-track feasibility study and the permitting process to allow
for the incorporation of San Dionisio into a new combined mine plan
with Cerro Colorado.
Planes-San Antonio deposit
-- High grade copper and polymetallic deposit located immediately east of Cerro Colorado pit.
-- Historical resources estimated by Rio Tinto Minera in 1987
are 9.1 Mt at 1.67% Cu, 2.13% Zn, 1.07% Pb, 64 g/t Ag and 0.6 g/t
Au.
o Based on 158 underground holes plus 19 surface holes for a
total of 16,605 metres of diamond drilling.
o Contained metal in the historical resource represents 129,200
tonnes of Cu and 172,900 tonnes of Zn.
o Mostly polymetallic massive sulphides similar to those at San
Dionisio.
-- Deposit remains unmined but benefits from some prior
underground development and the sinking of a partially completed
shaft.
-- Next step will be to complete a NI 43-101 report during 2021
simultaneously with the work on the San Dionisio deposit.
Alberto Lavandeira, CEO, commented: "Atalaya is pleased to
outline its long term vision for the Riotinto District, which is
focused on creating value in the near term. With this reserve
update for Cerro Colorado, we have successfully established
"Proyecto Riotinto" as a long life producing mine and now is the
time to work towards new targets that can expand production
throughout the Riotinto District, extend mine life and create value
for all our stakeholders. The presence of substantial, unexploited
mineral resources in the vicinity of our modern 15 Mtpa mill and
related infrastructure, together with a very prospective land
package with world class exploration potential, offer compelling
opportunities for continued growth of our company."
Riotinto District
The strategic location of "Proyecto Riotinto", with its modern
15 Mtpa processing facility and associated infrastructure, is well
suited to become a centralised processing hub that sources ore from
several satellite deposits. In addition to San Dionisio and
Planes-San Antonio, this strategy could also include the Company's
wholly owned Masa Valverde and Majadales deposits as well as
potential new discoveries within the recently optioned Riotinto
East project (See Fig 1 in the Website Announcement).
The Iberian Pyrite Belt is one of the most prolific metallogenic
belts in the world and has seen five new discoveries during the
past six years. It also hosts several world-class polymetallic and
copper deposits as well as multiple sulphide showings and
historical mines, all related to volcanogenic massive sulphide
("VMS") systems. For many years, a similar centralised processing
hub has been successfully operated by Minas de Aguas Teñidas S.A.
("MATSA"), which operates a single processing plant that receives
ore from several regional mines. MATSA is jointly owned by
Trafigura and Mubadala
Cerro Colorado independent reserve update
Overview
As published in the Behre Dolbear NI 43-101 technical report
dated February 2013, Cerro Colorado open pit reserves prior to the
re-start by Atalaya Mining totalled 123 Mt at 0.49% Cu, based on a
0.20% Cu cut-off.
Atalaya achieved first production in July 2015 after a
fast-track restart and since then has completed two phases of
expansion at its processing plant, with nameplate capacity now at
15 Mtpa. Since re-start, approximately 50 Mt of ore at 0.5% Cu have
been mined and processed through to the end of December 2020.
Successive core and reverse circulation drilling campaigns
totalling over 98,400 metres in 802 holes have successfully
increased the open pit reserve base, allowing Atalaya to maintain
the original mine life despite the plant expansions and reserve
depletion.
Key assumptions
The reserve estimation and open pit optimisation were recently
prepared by Alan Noble P. E. of Ore Reserves Engineering, of
Lakewood, CO, USA and by Monica Barrero Bouza, Eurogeologist, in
compliance with CIM standards and procedures that are equivalent to
those appropriate for a report following Canadian NI 43-101
standards.
Reserves were estimated from the end of December 2020
topography. Updated geotechnical pit design parameters provided by
Atalaya based on revised pit stability analysis have been used as
an input for the economic pit analysis and mining phase
designs.
Economic pit limit analysis has been performed using the
Lerchs-Grossmann algorithm ("LG") for a copper price of US$3.10 and
current operating costs and recoveries. The US$3.50 LG shell was
used as the base of the ultimate pit design for resource
estimates.
Cerro Colorado Reserve Estimate
New Proven and Probable mineral reserves are 186 Mt at 0.38% Cu
for contained copper of approximately 702,000 tonnes (using a 0.16%
Cu cut-off). This implies a mine life of over 12 years based on
nameplate capacity of recently expanded 15 Mtpa mill.
Mineral Reserve Estimates by Classification
Cerro Colorado Pit Mineral Reserve Estimate
Mineral Reserves
>= 0.16% Cu Waste Total Strip
------------------------
Classification ktonnes Cu% S% ktonnes ktonnes Ratio
-------- ------ ------ -------- ------
Proven 138,929 0.377 5.389
Probable 46,791 0.382 5.698
Proven + Probable 185,720 0.378 5.467 341,847 702,022 1.84
-------- ------ ------
Note: figures as reported above are gross and net attributable
to the Company (Proyecto Riotinto is 100% owned by the
Company).
The contained Proven plus Probable mineral reserves above 0.16%
Cu cut-off from the 31 December 2020 topography are summarised in
table 1 in the Website Announcement. Additional cutoffs are
provided for sensitivity analysis at different copper prices.
Future plans
Now that Atalaya has confirmed the long-life status of the Cerro
Colorado deposit, the Company will continue to evaluate options to
optimise the extraction of its reserves. Potential areas that could
add value include geotechnical studies for pit angle optimisation,
blending of ore types and the reduction of hauling distances to
dumps, among others.
The presence of copper sulphides in the adjacent San Dionisio
deposit, including some resources that are potentially mineable by
open pit, offers a compelling opportunity to evaluate the
simultaneous mining of San Dionisio and the current reserves of
Cerro Colorado.
Atalaya plans to initiate a fast-track NI 43-101 report that
will contemplate the integration of San Dionisio into a new
combined mine plan with Cerro Colorado. This study will include
Atalaya pit dewatering and associated water treatment plans,
geotechnical work and metallurgical testing for polymetallic ores,
among other initiatives.
San Dionisio deposit
The San Dionisio massive sulphide deposit is located immediately
west of the Cerro Colorado pit and represents the western extension
of Filón Sur deposit. Originally this high-grade deposit was mined
for copper and sulphur using both open pit and underground mining
methods until 1992. The massive sulphides are surrounded by a
strong copper stockwork that was partially mined for copper ore
until late 1986 when activity stopped owing to low metals
prices.
In 1993, Rio Tinto Minera SA reviewed the San Dionisio deposit
and made an internal resource estimation, focused on underground
mining, based on two main ore types:
-- Copper stockwork of 17.2 Mt at 1.45% Cu
-- Massive sulphide of 45 Mt at 0.88% Cu, 2.2% Zn, 26 g/t Ag and 0.40 g/t Au
The remaining sulphides contain areas with good copper and zinc
grades. This was well documented based on historical mining records
and drilling information and has since been verified by Atalaya
through 48 drill holes completed during years 2017 to 2020.
Internal resource summary of San Dionisio constrained by the
US$3.50/lb Cu Pit
San Dionisio - Resource Estimate Summary -
Constrained by the US$3.50/lb Cu Pit Shell and 31 December 2020
Topography
Resource Cutoff (% Tonnes Cu eq (%) Cu (%) Zn (%) S (%)
Class Cu) (millions)
------------- ----------- -------- --------
Total Measured 0.2 44.9 0.97 0.76 0.92 26.48
----------- ------------- ----------- -------- -------- -------
Total Indicated* 0.2 7.7 0.56 0.41 0.69 21.17
----------- ------------- ----------- -------- -------- -------
Total M+I 0.2 52.6 0.91 0.71 0.89 25.71
----------- ------------- ----------- -------- -------- -------
Total Inferred 0.2 1.8 0,50 0.38 0.56 15.81
----------- ------------- ----------- -------- -------- -------
Note: figures as reported above are gross and net attributable
to the Company (Proyecto Riotinto is 100% owned by the
Company).
* Total indicated resources only include open pit tonnes not
underground tonnes.
Atalaya drill holes were collared from the benches of the old
Atalaya pit and targeted both the polymetallic massive sulphides
and the copper stockwork. Results confirmed the geological model
available from the historical records. Statistical comparisons
between the historical database and recent Atalaya drilling
indicated that Cu-Zn grades from the historical database are
underestimated by 6%.
Selected drilling results for the San Dionisio deposit
Hole_id From To Drill Cu (%) Zn (%) Pb (%) Ag ( Ore Type
(m) g/t )
------ ------ ------ ------ ------- -------
ATD045 245.8 323.7 77.9 3.39 4.29 0.57 53.13 MS
ATD002 408 512.5 104.5 1.97 1.32 0.26 - MS
ATD011 294 334 40 1.05 3.53 0.16 - MS
ATD044 366 470 104 0.79 4.17 0.44 36.81 MS
ATD033 356 460 104 0.74 3.43 0.32 39.96 MS
ATD011 186 247 61 3.78 1.23 0.12 - STW
ATD038 280 532 252 1.60 1.97 0.17 16.44 STW
ATD037 330.5 378.8 48.3 1.43 2.40 0.53 34.36 STW
ATD003 334 386 52 1.17 0.48 0.10 - STW
ATD011 84 154 70 1.14 0.78 0.09 - STW
--------- ------ ------ ------ ------- ------ ------- ------- ---------
Note: MS = massive sulphide mineralization and STW = stockwork
mineralization
Because of its proximity to current infrastructure (see Fig 2 in
the Website Announcement ), its good combined grades of copper and
zinc and the potential to mine a significant portion of the
resources by open pit methods, San Dionisio offers a promising
opportunity to create near term value. In addition, the potential
application of the E-LIX System could facilitate the integration of
San Dionisio's polymetallic sulphides into the existing processing
plant, given that testing to date indicates that E-LIX is well
suited to combined copper-zinc sulphide material.
Internal resource estimate
An internal CIM compliant preliminary resource estimate has been
completed to evaluate the mining potential of the remaining
resources using both open pit and underground methods. This work
was carried out by Dr. César Castañón, PhD Mining Engineering and
professor of the Department of Mining Methods and Prospection at
the University of Oviedo in Spain.
A block model was created using existing geological and drilling
information, both from historical sources and from recent
campaigns. Underground workings and mined out areas were
incorporated into the model.
Several scenarios of metals prices, operating costs, pit
restrictions and metallurgical recoveries were evaluated using only
blocks classified as Measured and Indicated Resources. The results
of the most realistic scenario (Scenario 4) are inserted in table 3
in the Website Announcement .
Internal resource estimate (Scenario 4, including pit
restrictions and US$3.5/lb Cu)
Mining Strip Mt CuEq% Cu% Zn% Cu Contained Zn Contained
Method Ratio (tonnes) (tonnes)
Open Pit 3.8 52.6 0.91 0.71 0.89 373,460 468,140
------- ----- ------ ----- ----- ------------- -------------
Underground* 18.3 1.17 0.69 2.19 126,270 400,770
------- ----- ------ ----- ----- ------------- -------------
Notes:
Cut-offs of 0.2% Cu for open pit and 0.7% Cu for underground
Cu equivalent was calculated using the formula: CuEq (%) = Cu(%)
+ Zn(%) / 4.505. For the preliminary evaluation of the potentially
mineable sulphides the following assumptions were used: Metal
prices of US$5,300/t and US$2,000/t for Cu and Zn, recoveries of
85% and 80% and payabilities of 80% and 50% respectively.
Internal estimates for underground indicated resources
Refer to Figure 3 in the Website Announcement.
Next steps
The results of the internal resource estimate were encouraging
enough to sanction the preparation of a NI 43-101 compliant
resource estimate for completion in 2021 and to commence a
fast-track feasibility study that considers a new mine plan to
combine San Dionisio with Cerro Colorado.
Planes-San Antonio deposit
As a next step for Planes-San Antonio during 2021, the Company
will also sanction the preparation of a resource estimate in
compliance with NI 43-101 standards.
Contacts:
Elisabeth Cowell / Adam Lloyd / + 44 20 3757
SEC Newgate Tom Carnegie 6880
+44 20 3170
4C Communications Carina Corbett 7973
----------------------------------- -------------
Canaccord Genuity
(NOMAD and Joint Henry Fitzgerald-O'Connor / James +44 20 7523
Broker) Asensio 8000
----------------------------------- -------------
BMO Capital Markets +44 20 7236
(Joint Broker) Tom Rider / Andrew Cameron 1010
----------------------------------- -------------
Peel Hunt LLP +44 20 7418
(Joint Broker) Ross Allister / David McKeown 8900
----------------------------------- -------------
About Atalaya Mining Plc
Atalaya is an AIM and TSX-listed mining and development group
which produces copper concentrates and silver by-product at its
wholly owned Proyecto Riotinto site in southwest Spain. Atalaya's
current operations include the Cerro Colorado open pit mine and a
modern 15 Mtpa processing plant, which has the potential to become
a centralised processing hub for ore sourced from its wholly owned
regional projects around Riotinto that include Proyecto Masa
Valverde and Proyecto Riotinto East. In addition, the Group has a
phased, earn-in agreement for up to 80% ownership of Proyecto
Touro, a brownfield copper project in the northwest of Spain. For
further information, visit www.atalayamining.com
SUMMARY OF RESERVES AND RESOURCES OF PROYECTO RIOTINTO
Table 1. Cerro Colorado Proven and Probable Reserves at
different Cu cut-offs
Mineral Reserve
April 2021 Model (210) - 31 Dec 2020 Topo- March
2021 Ult imate Pit
Proven Probable Proven + Waste
Probable
Required Internal tonnes %Cu tonnes %Cu tonnes %Cu tonnes Stripping
Cu Price Cut-off (000's) (000's) (000's) (000's) Ratio
US$/ %Cu
Ib
$4.00 0.12 161.301 0.344 52,937 0.354 214,238 0.347 313,328 1.46
$3.75 0.13 156.424 0.351 51,541 0.360 207,965 0.353 319,602 1.54
$3.50 0.14 151.005 0.359 49,966 0.367 200,971 0.361 326,596 1.63
$3.30 0.15 145.075 0.368 48,316 0.375 193,391 0.370 334,175 1.73
Base
Case $3.10 0.16 138.929 0.377 46,791 0.382 185,720 0.378 341,847 1.84
$2.90 0.17 132.503 0.387 45,116 0.390 177,619 0.388 349,947 1.97
$2.80 0.18 126.382 0.398 43,391 0.399 169,773 0.398 357,793 2.11
$2.66 0.19 120.197 0.409 41,747 0.407 161,944 0.408 365,623 2.26
$2.55 0.20 114.155 0.420 40,082 0.416 154,237 0.419 373,330 2.42
QUALIFIED PERSON STATEMENT
The scientific and technical information contained in the
Mineral Reserve Estimate at Cerro Colorado was prepared under the
supervision of Alan C. Noble P.E. of ORE Reserves Engineering, an
independent Qualified Person under the Canadian National Instrument
43-101.
The scientific and technical information contained in the San
Dionisio Resource Estimate has been prepared under the supervision
of César Castañón. Mr. Castañón is a PhD Mining Engineering and
professor of the Department of Mining Methods and Prospections at
the Oviedo School of Mines. He is a Member of the Society of Mining
Engineering of Spain and the Iberian Mining Engineers Board.
GLOSSARY OF TECHNICAL TERMS
CIM Canadian Institute of Mining, Metallurgy
and Petroleum
Cu Copper
----------------------------------------------------
Cut-off grade The minimum grade at which mineralised
material can be economically mined and
processed for the purpose of the reserve
calculation.
----------------------------------------------------
E-LIX Newly developed electrochemical extraction
process developed and owned by Lain Technologies
Ltd as describe in Atalaya's announcement
dated 28 October 2020.
----------------------------------------------------
Feasibility Study Is a comprehensive technical and economic
study of the selected development option
for a mineral project that includes appropriately
detailed assessments of realistically
assumed mining, processing, metallurgical,
economic, marketing, legal environmental,
social and governmental considerations
together with any other relevant operational
factors and detailed financial analysis,
that are necessary to demonstrate at
the time of reporting that extraction
is reasonably justify (economically mineable).
----------------------------------------------------
Iberian Pyrite Belt Geographical area with particular geological
features that host several mining projects
in Spain and Portugal.
----------------------------------------------------
Inferred Mineral That part of a Mineral Resource for which
Resource quantity and grade or quality are estimated
on the basis of limited geological evidence
and sampling. Geological evidence is
sufficient to imply but not verify geological
and grade or quality continuity. An Inferred
Mineral Resource has a lower level of
confidence than that applying to an Indicated
Mineral Resource and must not be converted
to a Mineral Reserve. It is reasonably
expected that the majority of Inferred
Mineral Resources could be upgraded to
Indicated Mineral Resources with continued
exploration.
----------------------------------------------------
Indicated Mineral That part of a Mineral Resource for which
Resource quantity, grade or quality, densities,
shape and physical characteristics are
estimated with sufficient confidence
to allow the application of Modifying
Factors in sufficient detail to support
mine planning and evaluation of the economic
viability of the deposit. Geological
evidence is derived from adequately detailed
and reliable exploration, sampling and
testing and is sufficient to assume geological
and grade or quality continuity between
points of observation. An Indicated Mineral
Resource has a lower level of confidence
than that applying to a Measured Mineral
Resource and may only be converted to
a Probable Mineral Reserve.
----------------------------------------------------
lb Pound.
----------------------------------------------------
MATSA Minas de Aguas Teñidas, S.A. a company
incorporate in Spain which owns Aguas
Teñidas, Magdalena and Sotiel mine
in Spain.
----------------------------------------------------
Measured Mineral That part of a Mineral Resource for which
Resource quantity, grade or quality, densities,
shape, and physical characteristics are
estimated with confidence sufficient
to allow the application of Modifying
Factors to support detailed mine planning
and final evaluation of the economic
viability of the deposit. Geological
evidence is derived from detailed and
reliable exploration, sampling and testing
and is sufficient to confirm geological
and grade or quality continuity between
points of observation. A Measured Mineral
Resource has a higher level of confidence
than that applying to either an Indicated
Mineral Resource or an Inferred Mineral
Resource. It may be converted to a Proven
Mineral Reserve or to a Probable Mineral
Reserve.
----------------------------------------------------
Mineral Reserve The economically mineable part of a Measured
and/or Indicated Mineral Resource. It
includes diluting materials and allowances
for losses, which may occur when the
material is mined or extracted and is
defined by studies at Pre-Feasibility
or Feasibility level as appropriate that
include application of Modifying Factors.
Such studies demonstrate that, at the
time of reporting, extraction could reasonably
be justified. Mineral Reserves are sub-divided
in order of increasing confidence into
Probable Mineral Reserves and Proven
Mineral Reserves. A Probable Mineral
Reserve has a lower level of confidence
than a Proven Mineral Reserve.
Mineral Resource A concentration or occurrence of solid
material of economic interest in or on
the Earth's crust in such form, grade
or quality and quantity that there are
reasonable prospects for eventual economic
extraction. The location, quantity, grade
or quality, continuity and other geological
characteristics of a Mineral Resource
are known, estimated or interpreted from
specific geological evidence and knowledge,
including sampling.
-------------------------------------------------
Preliminary Feasibility Is a comprehensive study of a range of
Study options for the technical and economic
viability of a mineral project that has
advanced to a stage where a preferred
mining method. in the case of underground
mining, or the pit configuration, in
the case of an open pit, is established
and an effective method of mineral processing
is determined.
-------------------------------------------------
Probable Mineral Is the economically mineable part of
Reserve an Indicated and, in some circumstances,
a Measured Mineral Resource demonstrated
by at least a Preliminary Feasibility
Study.
-------------------------------------------------
Proven Mineral Reserve Is the economically mineable part of
a Measured Mineral Resource demonstrated
by at least a Preliminary Feasibility
Study.
-------------------------------------------------
S Sulfur
-------------------------------------------------
VMS Volcanogenic Massive Sulphide
-------------------------------------------------
The above definitions of "Mineral Resource", "Inferred Mineral
Resource", "Indicated Mineral Resource", and "Measured Mineral
Resource" conform to CIM Definition Standards - For Mineral
Resources and Mineral Reserves, as prepared by the CIM Standing
Committee on Reserve Definitions, and adopted by CIM Council on 10
May 2014, and as required by NI 43-101, Standards of Disclosure for
Mineral Projects, of the Canadian Securities Administrators.
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