Atalaya Mining (LON:ATYM) reported first-quarter 2026 results that were held back by heavy rainfall in Spain, but management said stronger metal prices, silver credits and unusually favorable concentrate market conditions helped offset the production shortfall.
Chief Executive Officer Alberto Lavandeira told investors that output in the quarter was below the company’s plan after “very heavy rainfalls” in late January and throughout February affected mining operations. He said conditions improved after the quarter ended, with April and May described as “quite dry,” allowing Atalaya to exceed plan during those months and recover “a good part” of the first-quarter shortfall.
Despite the lower production, Lavandeira said the company generated €14 million of EBITDA in the quarter. Cash flow was nearly €30 million, which he said was sufficient to cover quarterly investments and Atalaya’s investment in Lara Exploration Ltd.
Atalaya ended the quarter with almost €300 million in cash and net cash of nearly €270 million. That balance included proceeds from a late-January capital raise of a little less than €150 million.
Lower Grades Weighed on Production, but Costs Stayed Within Guidance
Lavandeira said the processing plant performed consistently and recoveries were acceptable, but lower grades resulted in reduced copper production. Revenue was slightly lower than in prior periods, he said, although higher copper prices supported cash generation.
The company’s cost performance remained consistent with full-year guidance. Lavandeira said cash costs of €2.52 and all-in sustaining costs of €3.20 were within the guided range, even with the lower production base. Mining costs were higher because of reduced production and higher operating costs, mainly diesel, while processing costs were affected primarily by lower throughput.
By-product credits were a positive factor, helped by silver production and silver prices. Lavandeira also highlighted a major change in treatment and refining charges, saying they were net negative in the quarter, even after freight and other costs. He said some concentrate sales were tied to benchmark terms near zero, while a significant amount of production achieved negative treatment charges, meaning smelters effectively paid Atalaya to take its concentrates.
Lavandeira said most of Atalaya’s legacy offtake agreements have expired, with only limited remnants remaining this year and next year. He described uncommitted offtake at Rio Tinto and Touro as a “hidden asset” given strong demand for copper concentrates.
Full-Year Guidance Maintained, With Output Expected at Low End
Atalaya maintained its 2026 production guidance of 50,000 to 54,000 tonnes of copper, though Lavandeira said management now expects output to be at the low end of that range.
The company also kept its cost and capital expenditure guidance unchanged, while cautioning that geopolitical developments in the Middle East could affect diesel and explosives costs. Lavandeira said sustained higher diesel and gas prices could add €0.15 to €0.20 per pound to all-in sustaining costs, mainly through diesel. He added that electricity prices in Spain have not experienced the kind of spike seen during some previous conflicts, citing Atalaya’s solar plant, electricity hedging and low Spanish power prices following heavy rainfall.
In response to investor questions, Lavandeira said there is little the company can do to hedge diesel costs beyond the short term. He said Atalaya’s contractor seeks competitive quotes from multiple regional suppliers and that the company is trying to reduce haulage distances where possible during periods of elevated prices.
Project Pipeline Advances Across Spain
Lavandeira said work at San Antonio is progressing, with pre-stripping advancing toward higher-grade ore. At Masa Valverde, he said Atalaya has obtained permits and land, is clearing the portal area and is building an explosives magazine to support three-shift operations. The company continues infill drilling in areas where he said previous releases showed copper grades close to 2% with “very good thickness,” ahead of a planned ramp start this year.
Atalaya is also continuing engineering work on a polymetallic circuit to process material containing copper, zinc, lead and silver. Lavandeira said the installation is expected to cost about €80 million to €90 million, with work starting in 2026 and continuing into 2027. The project would add zinc flotation circuits and associated thickeners and filters to recover lead and zinc streams.
On Proyecto Touro in Galicia, Lavandeira said the company has seen significant progress in public commentary from regional officials. He cited comments from Galicia’s Minister of Industry, María Jesús Lorenzana, that required reports were finalized and positive, and that the environmental impact statement would be ready “before summer.” Lavandeira said Atalaya expects the statement during the second quarter, though the timing depends on the authorities.
While awaiting approvals, Atalaya is advancing engineering, launching tenders for key equipment and mine contractors, purchasing land, finalizing field offices and an assay lab, and continuing infill drilling near the pits. Lavandeira said Touro is expected to add at least 30,000 tonnes of copper per year, with operating costs projected around €0.50 per pound lower than Rio Tinto because of better grades, recoveries and concentrate quality.
During the Q&A session, Lavandeira said he believes the likelihood of extending Touro’s mine life is “100%,” pointing to prior reserve sensitivities at higher copper prices and open mineralization. He said he would expect “not less than 20 years” of life at the project, though current published expectations reference 12 to 15 years.
Lara Stake, E-LIX and Sustainability Discussed in Q&A
Lavandeira said Atalaya’s recent investment in Lara Exploration was funded from existing cash and did not rely on proceeds from the January fundraising. He characterized the stake as an investment, while leaving open the possibility of future international participation. He said Atalaya is mainly interested in Latin America where it has regional familiarity, especially Peru, Chile and Brazil.
Asked whether the Lara investment conflicted with the fundraising message focused on Spanish projects, Lavandeira said it did not. He said Atalaya does not expect to provide further funding to Lara for the feasibility study over the next two to three years.
On E-LIX, Lavandeira said the technology has recently been operating again after funding-related interruptions and has been working to remove zinc from lower-grade copper concentrates. He said operational results appear encouraging, but economic results are not yet available. He added that Atalaya decided it could no longer continue funding E-LIX through loans because of perceived risk.
CFO César Sánchez addressed sustainability ratings, saying Atalaya has worked with a tier-one adviser to help channel information about its activities. He said the company has not engaged sustainability rating agencies to improve its ratings, describing recent recognition as the consequence of “doing a good job for the last two years.”
Lavandeira closed by saying the quarter was difficult from a production standpoint, but favorable copper prices and tight concentrate markets helped offset the challenges. He said those conditions demonstrated the company’s potential and that Atalaya looks forward to “a very bright 2026 and the years to come.”
About Atalaya Mining (LON:ATYM)
Atalaya is a European copper producer that owns and operates the Proyecto Riotinto complex in southwest Spain. Atalaya's shares trade on the London Stock Exchange's Main Market under the symbol "ATYM". Atalaya's operations include the Cerro Colorado open pit mine and a modern 15 Mtpa processing plant, which has the potential to become a central processing hub for ore sourced from its wholly owned regional projects around Riotinto, such as Proyecto Masa Valverde and Proyecto Riotinto East. In addition, Atalaya has a phased earn-in agreement for up to 80% ownership of Cobre San Rafael S.L., which fully owns the Proyecto Touro brownfield copper project in the northwest of Spain, as well as a 99.9% interest in Proyecto Ossa Morena.
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