Atalaya upbeat on new mineral resource estimates

Atalaya Mining announced new mineral resource estimates for its San Dionisio and San Antonio deposits on Wednesday.

The AIM-traded firm said the deposits form part of Proyecto Riotinto, and are located adjacent to its operating Cerro Colorado open pit and 15 million tonnes-per-annum plant.

It said the estimates would be included in a new technical report that was being prepared by Ore Reserves Engineering for the overall Riotinto property, which would be published in the second quarter.

At the San Dionisio open pit resource - a west extension of the existing Cerro Colorado open pit, Atalaya reported a measured and indicated resource of 56.1 million tonnes at 0.91% copper, 1.14% zinc and 0.23% lead, at a cut-off of 0.15% copper.

It said the copper resource grade was around 140% higher than existing reserves at Cerro Colorado.

At the San Dionisio underground polymetallic resource, located below the potential open pit, it reported an inferred resource of 12.4 million tonnes at 1.01% copper, 2.54% zinc and 0.62% lead.

Finally, at the San Antonio underground polymetallic resource, east of the Cerro Colorado pit, Atalaya reported an inferred Resource of 11.8 million tonnes at 1.32% copper, 1.79% zinc and 0.99% lead.

A preliminary economic assessment was planned during 2022 for an operating schedule to combine Cerro Colorado reserves with higher-grade material from the San Dionisio deposit.

Subject to the relocation of certain infrastructure and the receipt of final permits, the potential open pit at San Dionisio could start delivering material to the Proyecto Riotinto plant by mid-to-late 2023, the firm said.

The board said it could potentially account for around one-third of its processing capacity, with Cerro Colorado ore providing the rest.

San Dionisio contained copper mineralisation that could be processed at the existing plant with minimal modifications, the company added with a contribution from the resource potentially providing an uplift to Riotinto copper production by increasing the blended head grade.

“The completion of an independent mineral resource estimate for the San Dionisio deposit is an important milestone for Atalaya,” said chief executive officer Alberto Lavandeira.

“As a result of its location beside Cerro Colorado and its nature as a pit extension, San Dionisio could become a near-term source of feed for the Proyecto Riotinto plant.

“Its development could provide material that is substantially higher grade than Cerro Colorado's existing reserves, thereby increasing copper production while maintaining current plant processing rates.”

Lavandeira said similarly, the new mineral resource estimate for San Antonio highlighted another potential source of higher-grade material that could increase production and extend mine life in the Riotinto district.

“Its proximity to the Riotinto plant and legacy infrastructure are expected to expedite future development and reduce capital intensity.”

At 1018 BST, shares in Atalaya Mining were down 2.44% at 400p.