Thu, 27 Jun 2019

Atalaya Mining Plc. ('Atalaya' and/or the 'Group')

Condensed Interim Consolidated Financial Statements for the three months ended 31 March 2019

NICOSIA, CYPRUS / ACCESSWIRE / May 23, 2019 / Atalaya Mining Plc (AIM: ATYM; TSX: AYM), the European mining and development company, is pleased to announces its unaudited quarterly results for the three months ended 31 March 2019, together with the unaudited, condensed, interim consolidated financial statements.

Unaudited Financial Highlights

Quarter Ended 31 March

Q1 2019

Q1 2018

%

Revenues from operations

k

51,712

52,676

(1.8)%

Operating costs

k

(30,026)

(36,426)

(17.6)%

EBITDA

k

19,510

14,998

30.1%

Profit for the period

k

14,155

8,790

61.0%

Earnings per share

cents/share

10.3

6.5

58.5%

Cash flows from operating activities

k

8,114

18,377

(55.8)%

Cash flows used in investing activities

k

(17,138)

(8,741)

96.1%

Cash flows from financing activities

k

-

48

n.q.

Working capital surplus

k

9,010

8,435

6.8%

Average realised copper price

$/lb

2.80

3.03

(7.6)%

Cu concentrate produced

(tonnes)

43,441

42,429

2.4%

Cu production

(tonnes)

10,219

9,441

8.2%

Cash costs

$/lb payable

1.89

2.27

(16.7)%

All-In Sustaining Cost

$/lb payable

2.18

2.65

(17.7)%

Revenues of 51.7 million for the three months ended 31 March 2019 ('Q1 2019') compared with 52.7 million for the three months ended 31 March 2018 ('Q1 2018'). The variance was due to stronger average US Dollar rates against the Euro and offset by lower copper prices and slightly lower volumes sold during the period.

Operating costs during Q1 2019 were 30.0 million compared with 36.4 million in Q1 2018. Lower expenses were mainly due to a reduction in earthworks and changes in inventories.

Cash costs during Q1 2019 were $1.89/lb of payable copper, an increase from cash costs of $1.77/lb of payable copper in Q4 2018 but lower than Q1 2018 ($2.27/lb). The decrease against Q1 2018 was mainly the result of lower mining, and technical services, maintenance, penalties and concentrate deductions. All-in Sustaining Costs ('AISC') during Q1 2019 amounted to $2.18/lb of payable copper, an increase from $2.00/lb of payable copper during Q4 2018 but lower than Q1 2018 ($2.65/lb).

Management expects cash costs for the year to remain within the guidance range provided of $1.95/lb to $2.15/lb and AISC from $2.25/lb to $2.45/lb.

EBITDA of 19.5 million in Q1 2019 compared with 15.0 million in Q1 2018. The increase in EBITDA was mainly the result of lower operating costs in Q1 2019.

Q1 2019 profit after tax amounted to 14.2 million (or 10.3 cents basic earnings per share) compared with a profit for Q1 2018 of 8.8 million (or 6.5 cents basic earnings per share).

Inventories of concentrate at 31 March 2019 amounted to 2.4 million (3.0 million at 31 December 2018).

At the end of Q1 2019 working capital was 9.0 million, a 0.6 million increase from 8.4 million at the end of Q4 2018. Unrestricted cash balances as at 31 March 2019 amounted to 23.8 million.

Financial Highlights (continued)

Cash flow from operating activities before changes in working capital was 20.3 million for Q1 2019 compared with a cash flow of 15.2 million during Q1 2018.

Net cash flow from operating activities after changes in working capital was 8.1 million for Q1 2019 compared with a cash flow of 18.4 million during Q1 2018.

Operational Highlights

Proyecto Riotinto

Copper production during Q1 2019 was 10,219 tonnes, an increase of 8.2% compared with 9,441 tonnes produced during Q1 2018.

Ore processed during Q1 2019 was 2,445,977 tonnes, an increase on Q1 2018 when ore processed amounted to 2,206,861 tonnes.

Copper recovery during the quarter was 90.27%, higher than 88.47% achieved in Q1 2018.

The Company maintains its previously stated copper production guidance for 2019 of 45,000 - 46,500 tonnes.

Expansion to 15Mtpa at ProyectoRiotinto

The 15Mtpa expansion project has progressed materially during the quarter with expected mechanical completion on track for the end of Q2 2019. Overall progress completion at the end of the quarter was 97% with construction reporting 72% completion.

The new primary crushing area is mechanically well advanced with electrical works progressing. In the new milling area, mechanical activities are progressing according to plan. New flotation and concentrate handling areas are in the final stages of commissioning.

Proyecto Touro

During the quarter, feedback has been received from the relevant Administration bodies as part of the assessment of the environmental impact studies. The Company is addressing additional requests to complement current management plans. This stage of the process is expected to last until the end of Q2 2019.

Legal updates

On 29 March 2019, the Company announced that it had received notification from the Supreme Court in Spain that it does not have jurisdiction over the appeal made by the Junta de Andalucia ('JdA') and the Company, which voluntarily joined the appeal as co-defendant. Therefore, the previously announced Ruling made by the Tribunal Superior de Justicia de Andalucia ('TSJA') remains valid. The Company will continue operating the mine normally and has been advised the Ruling will not impact its operations at Proyecto Riotinto.

On 26 April 2019, the Company announced a judgment related to the Mining Permits to operate Proyecto Riotinto (the 'Mining Permits') was handed down by the TSJA. The TSJA declared the Mining Permits are linked to the Environmental Permits, ruled by the same tribunal on September 2018. The new ruling on the Mining Permits is based on the requirement to have an AAU before issuing mining permits and therefore invalidates the existing Mining Permits. The TSJA has not accepted the requests by EeA for the cessation of activities at the mine and an increase in the scope of the environmental plan.

All the pending claims made by EeA have now been ruled by the TSJA. Atalaya continues to work with its legal advisors to evaluate the possibility of appealing the ruling and to ensure the JdA addresses all procedural points raised in both rulings. The Company continues operating the mine normally as the rulings do not state the operation at Proyecto Riotinto is to be ceased, not even temporarily and it is still confident that the ruling will not impact its operations at Proyecto Riotinto. The JdA has publicly supported the continuation of the mine.

Alberto Lavandeira, CEO commented:

'We are delighted withAtalaya's financial performance for Q1 2019, in which reduced operating costshave led to a substantial increase in profits of over 60%. Progress with ourexpansion to 15Mtpa at Proyecto Riotinto is proceeding to plan with mechanicalcompletion on track for the end of Q2 2019. Once completed, we will enjoyimproved operational efficiencies and reduced cash costs compared with 2018. Wemaintain our guidance for full year 2019 production of 45,000 to 46,500 tonnesof copper.'

This announcement containsinformation which, prior to its publication constituted inside information forthe purposes of Article 7 of Regulation (EU) No 596/2014.

Contacts:

Newgate Communications

Elisabeth Cowell / Adam Lloyd / Tom Carnegie

+ 44 20 3757 6880

4C Communications

Carina Corbett

+44 20 3170 7973

Canaccord Genuity (NOMAD and Joint Broker)

Henry Fitzgerald-O'Connor / James Asensio

+44 20 7523 8000

BMO Capital Markets (Joint Broker)

Jeffrey Couch / Tom Rider / Michael Rechsteiner

+44 20 7236 1010

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. 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 which is currently in the permitting stage. For further information, visit www.atalayamining.com

Management's review

(All amounts in Euro thousands unless otherwise stated)

For the three months to 31 March 2019 and 2018 - (Unaudited)

ATALAYA MINING PLC

MANAGEMENT'S REVIEW AND

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

31 March 2019

(UNAUDITED)

Notice to Reader

The accompanying unaudited, condensed, interim consolidated financial statements of Atalaya Mining Plc have been prepared by and are the responsibility of Atalaya Mining Plc's management. The unaudited, condensed, interim consolidated financial statements have not been reviewed by Atalaya's auditors.

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 2018 and 31 March 2019 and results of operations for the three months ended 31 March 2019 and 2018.

This report has been prepared as of 22 May 2019. The analysis, hereby included, is intended to supplement and complement the unaudited, condensed, interim consolidated financial statements and notes thereto ('Financial Statements') as at and for the three months ended 31 March 2019. 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 2018, and the unaudited, condensed interim consolidated financial statements for the three months ended 31 March 2018. These documents can be found on Atalaya's website at www.atalayamining.com.

Atalaya prepares its Financial Statements in accordance with International Financial Reporting Standards ('IFRSs'). The currency referred to in this document is the Euro, unless otherwise specified.

Forward-lookingstatements

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 constitutes 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. Description of thebusiness

Atalaya is a Cyprus European mining and development company. The Company is listed on the AIM Market of the London Stock Exchange ('AIM') and on the Toronto Stock Exchange ('TSX').

Proyecto Riotinto, wholly owned by the Company's subsidiary Atalaya Riotinto Minera, S.L.U., is located in Huelva, Spain. The Group operates the Cerro Colorado open-pit mine and its associated processing plant where copper in concentrate and silver by-product are produced. A brownfield expansion of the plant is in progress.

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 the copper project. Proyecto Touro is located in Galicia, north-west Spain.

2. Overview ofoperational results

Proyecto Riotinto

The following table presents a summarised statement of operations of Proyecto Riotinto for the three months ended 31 March 2019 and 2018.

Units expressed in accordance with the international system of units (SI)

Unit

Three months
ended

31 Mar 2019

Three months ended

31 Mar 2018

Three months ended

31 Dec 2018

Ore mined

t

2,549,985

2,559,201

2,814,637

Ore processed

t

2,445,977

2,206,861

2,631,092

Copper ore grade

%

0.46

0.48

0.48

Copper concentrate grade

%

23.52

22.25

24.01

Copper recovery rate

%

90.26

88.47

89.05

Copper concentrate

t

43,441

42,429

46,531

Copper contained in concentrate

t

10,219

9,441

11,172

Payable copper contained in concentrate

t

9,785

9,016

10,706

Cash cost*

$/lb payable

1.89

2.27

1.77

All-in sustaining cost*

$/lb payable

2.18

2.65

2.00

(*) Refer to Section 5of this Management's Review

Note: The numbers in the above table may slightly differ among them due to rounding.

Three months operational review

Copper production at Proyecto Riotinto for Q1 2019 increased to 10,219 tonnes from 9,441 tonnes reported in Q1 2018, and 11,172 tonnes in Q4 2018, representing an increase and a decrease of 8.2% and (8.5)%, respectively. Ore milled was consistent with previous quarters and in line with management's expectations. Copper head grade was in line with previous quarter and with expectations. The increase in copper production during the quarter compared with Q1 2018 was mainly attributable to a record average recovery of 90.26%.

Mining operations are progressing according to plan and at similar levels to previous quarters. On a combined basis, ore, waste and marginal ore amounted to 2.3 million m3 in Q1 2019 versus 2.5 million m3 in Q4 2018. Additional mining equipment is available on site in anticipation of the increase in production scheduled for H2 2019.

During Q1 2019, the Group sold 45,172 tonnes of concentrates, compared with 44,487 tonnes in Q4 2018 and 48,682 tonnes in Q1 2018. On-site concentrate inventories at the end of the quarter were approximately 2,936 tonnes. All concentrate in stock at the beginning of the quarter and produced during the quarter was delivered to the port at Huelva.

Exploration around Proyecto Riotinto is progressing well with two drilling programmes under way. Remaining massive sulphides and stockwork mineralisation are being targeted under the Atalaya pit. Lateral extensions of massive sulphides and stockwork are also being drilled around Filon Sur. Geological modelling is being updated as information becomes available.

2. Overview of operational results (continued)

Expansionto 15Mtpa at Proyecto Riotinto

The 15Mtpa expansion project has progressed materially during the quarter with expected mechanical completion on track for the end of Q2 2019. Overall progress completion at the end of the quarter was 97% with construction reporting 72% completion. The new primary crushing area is mechanically well advanced with electrical works progressing. In the new milling area, mechanical activities are progressing according to plan. New flotation and concentrate handling areas are in the final stages of commissioning.

Proyecto Touro

During the quarter, feedback has been received from the relevant Administration bodies as part of the assessment of the environmental impact studies. The Company is busy addressing additional requests to complement current management plans. This stage of the process is expected to last until the end of Q2 2019.

3. Outlook

Theforward-looking information contained in this section is subject to the riskfactors and assumptions contained in the cautionary statement on forward-lookingstatements included in the introduction note of this report.

Operationalguidance

Proyecto Riotinto operational guidance for 2019 remains as follows:

Guidance

Unit

2019

Ore processed

million tonnes

11.4

Contained copper

tonnes

45,000 - 46,500

Copper head grade for 2019 is budgeted to average 0.47% Cu, with a recovery rate of approximately 85% to 87%. Cash operating costs for 2019 are expected to be in the range of $1.95/lb - $2.15/lb, and AISC is estimated to be in the range of $2.25/lb - $2.45/lb.

4. Overview of thefinancial results

The following table presents summarised consolidated income statements for the three months ended 31 March 2019, with comparatives for the three months ended 31 March 2018.

(Euro 000's)

Three months ended

31 Mar 2019

Three months ended

31 Mar 2018

Revenue

51,712

52,676

Total operating costs

(30,026)

(36,426)

Administrative and other expenses

(1,917)

(1,053)

Exploration expenses

(201)

(199)

Care and maintenance expenditure

(5)

-

EBITDA

19,510

14,998

Depreciation/amortisation

(3,426)

(4,100)

Net foreign exchange gain

713

170

Net finance cost

(31)

(7)

Tax

(2,611)

(2,271)

Profit for the period

14,155

8,790

Three months financial review

Revenues for the three month period ended 31 March 2019 amounted to 51.7 million (Q1 2018: 52.7 million). Lower revenues, compared with the same quarter in the previous year, were mainly driven by stronger US Dollar average rates against Euro and offset by lower copper prices and slightly lower volumes during the period.

Realised prices of $2.80/lb copper during Q1 2019 compared with $3.03/lb copper in Q1 2018. All concentrates were sold under offtake agreements in place.

Operating costs for the three month period ended 31 March 2019 amounted to 30.1 million, compared with 36.4 million in Q1 2018. The decrease was mainly due to lower mining and processing variable costs, in addition to a lesser depreciation charge (due to an extension of the life of mine as per updated reserves and resources report in mid-2018).

Cash costs of $1.89/lb payable copper during Q1 2019 compared with $2.27lb payable copper in the same period last year. Cash costs were impacted by lower mining, technical services and maintenance costs and higher capitalised stripping costs compared with Q1 2018. Capitalised stripping costs during Q1 2019 amounted to 0.8 million compared with 0.3 million in Q1 2018. All-in sustaining costs in the reporting quarter were $2.18/lb payable copper compared with $2.65/lb payable copper in Q1 2018. The decrease in AISC compared with Q1 2018 mainly related to lower sustaining capex and agency fees as well as lower cash operating costs.

Sustaining capex for Q1 2019 amounted to 1.7 million compared with 2.7 million in Q1 2018. Sustaining capex related to enhancements in processing systems of the plant and continuous development programmes at the tailings storage facilities.

Administrative and other expenses amounted to 1.9 million (Q1 2018: 1.1 million) and include non-operating costs of the Cyprus office, corporate legal and consultancy costs, on-going listing costs, officers and directors' emoluments, and salaries and related costs of the corporate office.

Exploration costs at Proyecto Riotinto for the three month period ended 31 March 2019 amounted to 0.2 million, similar amount that in Q1 2018. All exploration costs at Proyecto Touro are capitalised.

EBITDA for the three months ended 31 March 2019 amounted to 19.5 million compared with Q1 2018 of 15.0 million.

The main item below the EBITDA line is depreciation and amortisation of 3.4 million (Q1 2018: 4.1 million). Net financing costs for Q1 2019 amounted to 31k compared with 7k in Q1 2018.

Copperprices

The average realised copper price decreased 7.6% from US$3.03 per pound in Q1 2018 to US$2.80 per pound in Q1 2019.

The average prices of copper for the three months ended 31 March 2019 and 2018 are summarised below:

(USD)

Three months ended

31 Mar 2019

Three months ended

31 Mar 2018

Realised copper price per lb

2.80

3.03

Market copper price per lb

2.82

3.16

Realised copper prices for the reporting period noted above have been calculated using payable copper and including provisional invoices and final settlements of quotation periods ('QPs') together. Lower realised prices than market averages are mainly due to the final settlement of invoices where QP was fixed in the previous quarter due to a short open period when copper prices were lower. The realised price of shipments during the quarter excluding QP was approximately $2.82/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') and 'realised prices' 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.

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 sustaining capital expenditures.

Realised price per pound of payable copper is the value of the copper payable included in the concentrate produced before deducting the penalties, discounts, credits and other features governed by the offtake agreements of the Group and all discounts or premiums provided in commodity hedge agreements with financial institutions, expressed in USD per pound of payable copper. Realised price is consistent with the widely accepted industry standard definition.

6. Liquidity and capitalresources

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 31 March 2019 and 31 December 2018.

Liquidity information

(Euro 000's)

31 March 2019

31 December 2018

Unrestricted cash and cash equivalents at Group level

22,089

24,357

Unrestricted cash and cash equivalents at Operation level

1,707

8,463

Restricted cash

250

250

Working capital surplus

9,010

8,435

Unrestricted cash and cash equivalents as at 31 March 2019 decreased to 23.8 million from 32.8 million at 31 December 2018. The decrease in cash balances is the result of net cash flow incurred in the period. Cash balances are unrestricted and include balances at operational and corporate level.

Restricted cash remains at 0.3 million as at 31 March 2019 and mainly relates to deposit bond guarantees.

6. Liquidityand capital resources (continued)

As of 31 March 2019, Atalaya reported a working capital surplus of 9.0 million, compared with a working capital surplus of 8.4 million at 31 December 2018. The main liability of the working capital is trade payables related to Proyecto Riotinto contractors. At 31 March 2019, trade payables have been reduced by circa 17% compared with the same period last year.

Overview of the Group'scash flows

(Euro 000's)

Three months ended

31 Mar 2019

Three months ended

31 Mar 2018

Cash flows from operating activities

8,114

18,377

Cash flows used in investing activities

(17,138)

(8,741)

Cash flows from financing activities

-

48

Net (decrease)/increase in cash and cash equivalents

(9,024)

9,684

Three months cash flows review

Cash and cash equivalents decreased by 9.0 million during the three months ended 31 March 2019. This was due to the net results of cash from operating activities amounting to 8.1 million and the cash used in investing activities amounting to 17.1 million.

Cash generated from operating activities before working capital changes was 20.3 million. Atalaya increased its trade receivables in the period by 11.9 million, decreased its inventory levels by 0.8 million and decreased its trade payables by 1.0 million.

Investing activities during the quarter consumed 17.1 million, relating mainly to the expansion project Capex and sustaining capex mostly in enhancements in processing systems of the plant.

Foreignexchange

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'), 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 months ended 31 March 2019, Atalaya recognised a foreign exchange profit of 0.7 million. Foreign exchange losses mainly related to change in the period end 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:

Three months ended

31 Mar 2019

Three months ended

31 Mar 2018

Average rates for the periods

GBP - EUR

0.8725

0.8833

USD - EUR

1.1358

1.2292

Spot rates as at

GBP - EUR

0.8583

0.8749

USD - EUR

1.1235

1.2321

7. Deferredconsideration

In September 2008, the Group moved to 100% ownership of Atalaya Riotinto Mineral S.L. ('ARM') (and thus full ownership of Proyecto Riotinto) by acquiring the remaining 49% of the issued capital of ARM. At the time of the acquisition, the Group signed a Master Agreement (the 'Master Agreement') with Astor Management AG ('Astor') which included a deferred consideration of 43.9 million (the 'Deferred Consideration') payable as consideration in respect of the acquisition. The Company also entered into a credit assignment agreement at the same time with a related company of Astor, Shorthorn AG, pursuant to which the benefit of outstanding loans was assigned to the Company in consideration for the payment of 9.1 million to Shorthorn (the 'Loan Assignment').

The Master Agreement has been the subject of litigation in the High Court and the Court of Appeal that has now concluded. As a consequence, ARM must apply any excess cash (after payment of operating expenses, sustaining capital expenditure, any senior debt service requirements and up to US$10 million per annum (for non-Proyecto Riotinto related expenses)) to pay the consideration due to Astor (including the Deferred Consideration and the amount of 9.1 million payable under the Loan Assignment). 'Excess cash' is not defined in the Master Agreement leaving ambiguity as to how it is to be calculated.

As at 31 March 2019, no consideration has been paid.

The amount of the liability recognised by the Group is 53 million. The effect of discounting remains insignificant, in line with 2018 assessment, and therefore the Group has measured the liability for the Astor deferred consideration on an undiscounted basis.

8. Corporatesocial responsibility

During the quarter, Atalaya has continued its involvement in social responsibility through several activities through Fundacion Atalaya Riotinto.

Continuing its work in education and entrepreneurship, the Company has renewed the Language School Program in cooperation with the City Council of Nerva, and has restarted the school visits program of the mining region to Atalayas facilities.

The Company has launched the second edition of 'el Reto Malacate': an initiative to reward the best business project to be settled in the region.

In cooperation with the City Hall of Minas de Riotinto, Atalaya has provided the necessary funding for the opening of the Museum of the Town, which contains large scale models that represent the old town of Minas de Riotinto.

Atalaya has also reached agreements with the towns of Nerva and Campofrio to, respectively, repopulate an important avenue with palm trees, and labelling through towns advertising to attract tourism.

Also, in collaboration with Asociacion Matilde, the Company has cooperated in a program consisting of restoring an organic local garden and selling its products to the market. People involved in this project comes from families at risk of social exclusion.

Atalaya has also taken part into the GAVI program (Business Alliance for Childhood Vaccination) in collaboration with the Fundacion La Caixa' and Bill & Melinda Gates Foundation.

9. Healthand safety

The prevention of occupational hazards has the highest priority in the Company. The investigation and the analysis of any type of accident is fully performed under the 'methodology of the 5 whys' to both own personnel and contractors, even if the accident results in no lost time injury.

During Q1 2019 the Company worked alongside with contractors to strongly reinforce the compliance of safety regulations and accident prevention, establishing a quality assessment of the safety actions carried out by Atalaya.

In addition, the Company is running a program for the evaluation of psychosocial factors in the work environment. For this purpose, Atalaya and the employees 'representatives has formed a working group, supported by an external consulting company. The Company has given out a survey to all its personnel to be submitted on a voluntary basis and entirely confidential. The final results of the survey will be analysed by the external consultant and the Company will receive feedback in the coming months, so to implement a guideline in the improvement of working conditions.

9. Healthand safety (continued)

The Company is also developing a training program for high-risk activities. This program involves trainings in the assembling of lifelines, interlocking of equipment, working in cramped spaces, etc.

All these lines of work are resulting in enhancements of safety with respect to the previous year, meaning just two accidents with a minor loss in the first quarter of 2019.

The Company carries on working towards zero damages.

10. Environmentalmanagement

During the first quarter of 2019, the environmental department has continued executing the actions of environmental monitoring of the activity, management of the natural environment and the usual historical heritage. Key points of the quarter:

- An analysis of the evolution of the diffuse contamination has been performed, registering a 37% decrease in the pollutant load towards the Tinto and Odiel rivers, thanks to the restoration and water management actions carried out since the beginning of the mining operation.

- Results in terms of emissions to the atmosphere and air quality from 2018 have been analysed and veryfied that the limit values and established target values were met in all the controls carried out.

- Results from 2018 analysis showed a reduction of 16% in the production of hazardous waste and 25% in non-hazardous waste with respect to 2017.

Archaeological excavation work has continued, focusing on the Look Out site for its release as soon as possible.

11. 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 2018.

12. Criticalaccounting policies, estimates and accounting changes

The preparation of Atalaya's Financial Statements in accordance with IFRS requires management to make estimates 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 2018.

13. Otherinformation

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

Interim ConsolidatedIncome Statements

(All amounts in Euro thousands unless otherwise stated)

For the three months to 31 March 2019 and 2018 - (Unaudited)

(Euro 000's)

Notes

Three months ended

31 March 2019

Three
months ended

31 March 2018

Revenue

4

51,712

52,676

Operating costs and mine site administrative expenses

(30,026)

(36,392)

Mine site depreciation and amortization

(3,426)

(4,100)

Gross profit

18,260

12,184

Administration and other expenses

(1,917)

(1,049)

Share-based benefits

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