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Atalaya raising £39M to fund Proyecto Riotinto copper project expansion

Atalaya Mining plc intends to raise up to about £39 million to fund the 15 million-tonnes-per-annum expansion plan at its Proyecto Riotinto in southwestern Spain.

The expansion is aimed at upgrading the processing facilities for copper production to about 50,000 tonnes to 55,000 tonnes per year, the company said Dec. 4.

The capital cost to complete the expansion is estimated at €80.4 million, and the company expects to cut its cash costs and all-in sustaining costs by about 7%, compared to the existing 9.5 Mtpa operation.

The expansion is expected to result in an incremental post-tax net present value, discounted at 8%, of about US$113 million, and a post-tax internal rate of return of about 43%, based on a copper price of US$3.00 per pound and a silver price of US$18.00 per ounce.

The ground construction works will start during the first quarter of 2018, with commissioning scheduled for the second half of 2019 and nominal production during the first half of 2020.

To fund the expansion, Atalaya will issue up to 23,335,910 common shares at £1.67 per share, and the placing is expected to close Dec. 8.

The company received binding commitments from major shareholders to acquire 72% of the total shares on offer.