📈 Presentación de César Sánchez de Atalaya Mining

And what I would also like to do is thank the organization, truly. I am really impressed, for the first time we participate in this event, and I am quite satisfied with what I am seeing. Also, to make a distinction that I think you, as analysts, will understand: there is a difference between mining companies and any other business presented before. The mining business is a finite business, and that conditions you a lot when managing your company. Being a finite business, you have to orient all your capacity towards certain actions to avoid that happening, and when it does, to have a replacement. That also affects the amount of commodity in the world. So let's start very quickly. First, I want to say that the presentation is available on our website. You can access it. The presentation has many slides, many of which I will go through quickly to focus on what I think in these 20 minutes are of greatest interest to you. First, there are some necessary disclaimers. These disclaimers are legal regarding the projection of future data, knowledge, definition, and nomenclature of terms used that are not supported under IFRS, and all technical aspects of the technical reports that are audited by external consultants.

We will start with the copper market. Here on this slide you have copper consumption since 1900. You see these cycles here, which look too small; these cycles are 25 years. They show how much demand has risen: around 5 million tonnes in 25 years, and this has been repeated from 1900 to 2023, reaching approximately the copper market currently around 27 million tonnes, plus 5 million from recycling. So we are talking about around 33 million tonnes. And these are all the technological advances: railways, all technological advances, home expansion, the arrival of the microwave, which have influenced copper consumption. Well, that is the historical part, and this is the expected consumption. So everyone, as Adrián said, has a clear vision of what copper demand will be in the future. And how is it quantified? Well, here is the part from the bank BIMO that is quantifying it, like any other quantification: from 32 million tonnes currently in 2022 to 39 million, that is an increase of 7 million tonnes. And that increase in demand, from whom? You think, many people think: electric cars, the grid, electrical infrastructure, or maybe the 8,000 million people in the world, classifying them between the most advanced with high electricity consumption and those trying to follow that advanced world and trying to consume construction. But when I look at demand honestly, I don't see everything you see; what I see is this: if we are saying that in the next not even 10 years, in the next 7-8 years we are going to increase by 7 million, what does that mean in terms of supply? In terms of supply, you have Codelco, the largest producer, a Chilean national company that is the largest copper producer in the world. These 7 million are five times Codelco. That is 6.5 times the largest mine with the highest production, which is around 1.5 million tonnes per year. So these are mines with production around 1 million tonnes. To grow by 7 million in 7 years, five times the company that produces the most... well, you see the demand side; I see the supply side. My main thesis is that it is very difficult to achieve, but not only for that reason. Let's see what the implications are today of opening a mine. As Adrián said, there are other mines in other phases of the process. We have suffered it: we joined the management team in 2014, we obtained the permits for the Rio Tinto mine, which is the mine we are producing, and we are now in the process of having a new mine, Touro in the north, in Galicia. And we are in this cycle where from the time you know, do the exploration, the discovery, until you make the decision to invest, and until you make the investment, commissioning, and ramp-up, the average is 16.2 years. That is, you need 6.5 times the largest mine in the entire world, and even if it were discovered tomorrow—by the way, there have been large discoveries in the DRC, recent discoveries, but after that there haven't been many large discoveries—we are going to discover six times that production of the largest mine in the world and put it into practice during all this time. This growth, despite the fact that currently permits in a normal country take around 9 years, and also assuming nothing bad happens, because if something bad happens, it subtracts part of the supply. What happened recently with Cobre Panama? Well, the unconstitutionality was declared after First Quantum invested more than $8.5 billion, the largest foreign investment in the country, 5% of GDP, and they closed the mine. How did they close the mine? What does it mean to say we have a fast track to get all permits? And what investment does it require? Well, on average, look at several examples: Quebrada Blanca, the second project, is a brownfield investment of $9 billion to obtain a capital intensity of $30,000 per tonne of copper per year. That is, if you take these 9 million and the increase in copper production, it comes out to $30,000 per tonne of copper per year. At Aitik, the expansion, you have to do all these infrastructure works: $5.5 billion, a copper intensity of $18,000 per tonne of copper per year. And well, the investment that Cobre Panama represented, with $6.7 billion, that is $22,000. We will come back to these numbers. But this is the demand side, and I think everyone is quite clear. Let's give a few more examples on the supply side.

The largest mine in the world: Codelco, the largest producer, the largest copper-producing company. By the way, and this is related to this, in 2024 it is expected to cease being the company that produces the most copper; Freeport will overtake it. Why? Because it is a finite business. And what does a finite business mean? That our mineral is depleted, it has lower grades, it is deeper, it is in more remote places where you require infrastructure. So, in the end, the permits you have to have, just to give some data: look, this is based on their own financial statements. Escondida, the largest in the world: look at the forecast decline it has in 2027-2029. Codelco, to maintain its production in the next 10 years, needs to invest $40 billion. All this is to maintain. If you want the 33% in 2028, that means all the projects under construction and ramp-up with the levels of capital intensity we have seen. Well, this is supply and demand, and clearly some conclusions are drawn. I also see the beginning of a supercycle in the price of copper, at least it's the commodity I'm focusing on. In the price of copper, what I do see is that there are difficulties on the supply side to meet demand, and that tension will generate large increases in the price of copper. I don't know what those copper prices will be; for me they should have been last year, but I don't know how long it will take for the copper price to rise. What I am convinced of is that the copper price will rise because, even if everything goes perfectly, copper is depleted, and it is hard to think that any mine in the world of significant size will not have any problems in the next 10 years, when all mines, including ours of course, but all mines are always producing at more than 100% of their capacity because it is a finite market. As many analysts know, we sell all our production. That is, we sell; when you lose a month of production in the industry, it is said that you recover it at the end of the life of your mine because you will never have idle capacity in the plant to recover the following year. The negative part is that you have to focus on costs because the sale price, you have no capacity, no room for maneuver. Well, those are the main conclusions. And now, who are we? Atalaya. Well, this is a first presentation before going through a bit of the path we have taken, so you know that my name is César Sánchez. I am the Chief Financial Officer of Atalaya Mining PLC. Atalaya Mining PLC is a company listed on the London Stock Exchange. Currently we are trading on the AIM market, but we have finished the process, we are about to finish the process to move to the main market of London, combined with a redomiciliation for historical reasons, not fiscal, because evidently they have their positive side. We have domiciled the parent company in Cyprus; I say for historical reasons, and now we are bringing that domiciliation to Spain with the objective that once we move from AIM to the main market, we can be included in the FTSE Russell indices. The market capitalization we have is around $600 million. We have net cash of $54 million. We maintain this over the last 12 months. We have debt of approximately around $60 million and we maintain approximately $110 million in cash; those are euros. Well, which gives you an enterprise value that is that amount. What operations do we have? All our operations are in Spain. When we entered, the company was Cypriot and had other interests in Cyprus itself, two projects in Georgia, in Greece; they were all sold because none of them we thought were strategic, and now we have focused on our production. Part of the reason we are bringing the parent company to Spain is because we are a Spanish company: all management are Spanish. We are 99.999%—we have more than 500 employees and more than 99.9% are Spanish. We have one employee in England and two employees in Cyprus, which as I say are small office functions. What projects do we have? We have the Rio Tinto mine, the historic Rio Tinto mine that gave its name to Rio Tinto plc, the historic Rio Tinto mine that has been mined since Roman times. In that Rio Tinto mine we have a first open pit, Cerro Colorado, that's why we call it a district because it's an open pit, and we will see a bit more. And we have the possibility to expand that open pit with San Dionisio and San Antonio. Additionally, we have another project that is fully permitted, with all permits granted, which is Masa Valverde, about 22 km from our processing plant. And finally, we have an exploration project in Rio Tinto. Also, we have another mine in the permitting phase, which is the Touro mine in Galicia, and I will say something about that. Also, recently, the company Sacyr had historically invested in mining, and we bought from Sacyr a series of exploration rights located in Extremadura, which we bought with the objective of being able to... This is our life. We also have a finite life. I think this represents our finite life well because it is true that it expands. When we started commercial declaration, we declared in May 2015 that we had 12 years of mine life. We are in 2024, almost 9 years have passed, we have produced, we have expanded the plant twice, and we still have 10 years of mine life or more. That is, we expand it now; that means we can expand it for 40 years. I estimate around 20-25 years. Recently, in the area, there is a mine precisely from First Quantum, Las Cruces, which has reached the end of its life; it closed, made an employment regulation file, and 300,000 tonnes of copper were lost forever. Now there is a second project, an underground mine, much more complex, much more costly, with a much higher copper intensity. But let's talk about our journey. This presentation is prepared for a forum that is not Spanish, so it has maps. You all know this: Seville, our mine is 80 km away by a national road, in the Iberian Pyrite Belt, the most geological information about the Pyrite Belt, where Grupo Mexico has a project there, and where historically there was a company called Trafigura, now there is a company called Sandfire that bought from Trafigura and Mubadala two years ago, 100% of the company that is Masa Valverde. And this is the port of Huelva, where the Atlantic Copper smelter is, a copper smelter of the Freeport group. So it is a very active mining area historically and currently.

What are we trying to do? Look, when I say people invest absolute barbarities, companies invest tremendous amounts of money to obtain a capital intensity of $30,000 per tonne of copper. Why? Because they have to build infrastructure. One positive aspect we have seen of operating in Spain is that you have water, towns that provide workers; you don't have to build a camp. That is, mines are in remote places; you don't have to build a camp, you don't have to set up a fly-in fly-out program, you don't have to have a corporate office in a city like London, Vancouver, or Toronto, which has a significant additional cost. And we have a mine that is in a very close area, which makes our intensity much lower than those being done on new projects. And it's because all these infrastructures that are necessary in countries like the Democratic Republic of Congo, where just recently between Ivanhoe and Trafigura they just approved a project to build a railway from the Congo to the nearest coast, more than 300 km of railway through the jungle, well that has a cost. We also have a team that is quite compact, that has been working together for a long time. I'm talking about the team, not the company. The same team that is currently managing Atalaya or the Rio Tinto mine is the same team that has built mines like Agua Blanca, Tasiast, Tanda, El Valle. It's literally the same team. Therefore, I think that demonstrates the capacity we can have when building a mine. I have spent a bit more time on this because it is interesting, to give more data on how we do things, which we do in a reasonably particular way. We obtained permits in 2014. The first thing we did was invest to reopen the existing plant with the idea of automatically having a capacity of 5 million tonnes per year, then automatically increase it to 9.5 million. That meant that in 2015 we started commercial production, and in 2016 we did the ramp-up. This is the production per quarter; I find it boring, meaning as operators, things are not bad. We first saw demand and supply, now we are seeing how we operate. Look at the stability: first expansion, second expansion, there are lower months. Well, this is 2022 with Q1, where we had a problem, for example, with a national transport strike that kept the plant closed for about 10 days. This is the impact of 10 days, so you can see the accuracy we have in production. These are our quarters. That is why we don't have to invest in infrastructure, why we have a lower copper intensity. This is perfectly aligned with our cash flow. We have raised approximately £64.5 million in equity plus £31 million in equity, no debt, all equity. There were historical reasons why we couldn't raise debt. That means that when we did all this expansion, all these investments, we did it on our own with equity. And this is our working capital. The tension in the finance department, owing more than €50 million to more than 1,000 suppliers, you can imagine how it was. But there was trust. We did an equity in December 2017, which is the last significant equity we did to go for the expansion, and that relieved us. We expanded again. And what do we have to expect? What we have is the copper sector. We produce at 100%, we are quite consistent, we do things well, we prepare, we are financially with a very solid balance sheet. What are we waiting for? For the copper price to rise. The copper price rose, and look at our cash flow: we went from negative to positive. In 2021, we paid nearly €50 million in dividends as an inaugural dividend and approved a dividend policy to distribute around 30% to 50% of our free cash flow. Our share—I want to make this clear—our vision is of the value of the company, and now I explain the reasons. If someone sees this company as a company that gives a recurring dividend, we do it, but they are significant. We are around a 2% yield. This is our situation, and simply to wait for another good year to come. I don't know if it will be this year or next, but some good year for the copper price will come. Maintaining our production, the numbers will come out on their own.

Rio Tinto is a district. What do we currently have? All those historical data we have shown is this open pit, Cerro Colorado. The intensity based on color: red is higher copper content. And this is the historic Rio Tinto open pit, the one that the British started mining. We are currently not mining anything there. Now, precisely at the end of Q4 2023, we have started the pushback of this open pit so that these two open pits start producing. This open pit has much higher grade than this one. Here you have the grade contents on the next slide. These are the open pits with a panoramic photo. This is our plant. This is the open pit we are currently mining, and this is the open pit where we have started all this. Currently it is being mined. With what objective? So that the 56 million tonnes we have here with a higher grade complement the 200 million tonnes we have here with a grade that is significantly better. We make a combined so that our grade increases. Here is simply the same photograph, but you have the capacity, the quantity. This is the mine life. These are the quantities, the grades, the copper content in our mine, and how it goes from 0.37% in Cerro Colorado to 0.78% on average in San Dionisio, and in San Dionisio polymetallic which is underground. So our idea is to start looking at this part, look at this area, and start doing underground mining, often taking advantage of the tunnels that are already there, which are ancient. What does San Dionisio mean for us? We have talked about Cerro Colorado and our data, but what does it mean? The increase in which we will process the mineral, and where does that mineral come from? This is the amount from Cerro Colorado by open pit, the amount by open pit from San Dionisio, and we start with the polymetallic first open pit and then underground. These are the amounts of mining and capacity, but I prefer to show you these data: this is our expected production, going from approximately 52,000 tonnes of copper in 2023 to more than 100,000 tonnes of copper equivalent, of which part is zinc and lead and part is copper. Does that mean a lot? Double. So it's a lot, a huge amount. And what economic impact does that have? Look, these are models that were done; specifically this one was done by Tetra Tech. They are recent models; many things can be improved, but it gives you an idea of our sensitivity to copper price and discount rate. If we have a copper price at this level—we are now at this price, but let's be prudent, let's use this price—at an 8% discount rate, we are talking that our company should have a net present value of more than $1 billion. I'm going fast because otherwise I won't have time. How are we going to mine this area? Evidently through the same procedure that Sandfire is doing: three mines. We are going to do these Masa Valverde projects, which are additional projects. And what else do we do? This is simply the increase in resources and reserves and the content we will have as a consequence of applying all our projects. You can see the details. Additionally, what are we doing? We are investing in technology. We have invested €30 million after 6 years of testing in a new technology that is called ELIX. We are not the owners of this technology; it is this lady here, who recently won the Andalusia award for her discovery. She has achieved something that anyone with technical knowledge knows is very difficult: to obtain directly a cathode from concentrate. Normally that goes to a smelter, where through heat procedures copper is extracted. This person has done it through a hydrometallurgical process. What that achieves is that we can increase recoveries in differential flotation for obtaining zinc and lead from 60% to 70%, and in copper and zinc from 75.7% to 85%. That is a natural increase of the copper we already have. So we have the first asset, and quickly: the first asset is in production, the Cerro Colorado part, with an expansion with San Dionisio that is already underway, and in theory, according to calculations by Tetra Tech, it can give us the possibility to produce double what we are currently producing over a series of years, and with recoveries we can improve. These recoveries are not taken into account in the previous calculation. Recoveries we can improve to obtain even more copper. And what else? We have another project called the Touro project, which is in Galicia. Here there are only two slides. It is a brownfield copper project where we are investing to obtain permits. What is its status? I personally believe we are in a very favorable situation. In Galicia, regional elections have just ended; the same party that has been governing won, with whom we have been working for many years to obtain a degree of confidence and maturity of the project in Galician society solid enough to obtain permits. And how are we going to demonstrate that? This year it is planned that we have applied for it to be qualified as a Strategic Industrial Project, which is a new regulation that came into force on January 1, 2024 in the Galicia region, which accelerates all industrial projects to half the time, with a maximum of 12 months to obtain all permits to start. We think it will be declared, and therefore it is an unequivocal sign that we will obtain permits. We have already made a series of investments; the most recent is to demonstrate that we are part of the solution, as part of the social license we are buying: investing €1.5 million in a water treatment plant so you can see the same river from the same point of view, how the water was in 2020 and how it was in May 2023.

What are the main conclusions? Copper production of 52,000 tonnes will rise: first with San Dionisio it will rise a bit, with the polymetallic part a bit more, and with the possibility of 30,000 additional tonnes from Touro another bit more, in addition to all the possible acquisitions we have been making in recent years. We have bought three companies; we continue trying to find another. It is a complicated market to buy an asset, especially assets close to production, due to the expectations in commodities. But we continue. Even if that doesn't happen—because we have been trying for a while and haven't succeeded—we already have something that is starting: these two together with something that will happen when we get permits. And what does this mean? That we will have that capacity, and our costs. Our first battle with analysts is the perception that we have high costs because when you apply a coefficient like C1, the cost of producing a pound of copper, generally that cost is associated with many other mines that produce in areas where infrastructure is different. So here we are higher. But I don't like to look at that; I like to look at the all-in sustaining cost. What does all-in sustaining cost mean? It doesn't work for me if you tell me how much it costs to produce there if you then have to make a series of investments, like renewing your fleet of trucks, which requires continuous and recurring investments of more than $50, $70, or $80 depending on the size of the mine. What do we do? Put it all in. That is, if I receive a pound of copper, what is the margin I have? If copper prices and production costs are these, and this is the reality, and if you make this comparison with the main producers that are associated, we are practically in the same range. This is the dividend part. Here I simply want you to see the dividends we have paid to date. With these three dividends, this was the first main dividend, and then we are paying around €10 million in dividends per year. And these are the equities we have done. And finally, and I'll end with this, if someone is thinking, 'Well, if I like copper, where can I buy copper?' This is a slide that shows in London what copper companies there are, marked in orange. As you can see, there aren't that many companies. There aren't that many companies where one can decide to buy copper and be exposed. One of the big ones is BHP, Rio Tinto, Glencore, Anglo American. But all of these have exposure to copper, but many others like coal have little to do with copper. This is Antofagasta, we are OTC, and Central Asia also has a mine. But after that, there aren't many, at least in London. And what valuation do they give us? This is an evaluation done by Jefferies recently, where you have to see how we are valued. I'm not going to tell you how to do your job, but do the numbers. Look at our EV/EBITDA. The companies that analysts follow and the brokers that follow us say this, and what is our share price? To get to the last slide, which is the conclusion, summarizing everything: if you think the copper price will rise as a consequence of supply, and you want to be exposed to the copper price, you have two alternatives: buy copper directly or buy a company that is well managed. We have demonstrated capacity to build, capacity to demonstrate, and capacity to do it very diligently with our shareholders' money. Additionally, we have organic growth capacity that does not depend on anyone. Here we only depend on permits. Touro depends on permits, but all this growth is ours. And if you make a comparison of Atalaya's NAV with these parameters and look at our share price, you will see that it is far below any other peer, and there aren't many. And with this, for now, I'll leave it. Thank you.