Atalaya Mining executes deal to buy interest in RNN

The AIM-traded firm said the agreement also included the acquisition of a 100% interest in three investigation permits that were also located along the Ossa-Morena Metallogenic Belt.

It said the group of 20 permits would be known collectively as Proyecto Ossa Morena (POM), being “strategically distributed” along prospective zones of the Ossa Morena Metallogenic Belt, and in particular along the southern flank of the major Olivenza-Monesterio Antiform.

In addition to the POM permits, Atalaya was also acquiring from the vendor a 51% interest in four investigation permits in the Sevilla province and a 100% interest in two investigation permits in the Almeria province, both in the south of Spain.

Atalaya said it would pay €2.5m in cash in three instalments, and grant a 1% net smelter return royalty over all acquired permits.

The first payment of €0.5m would be made following execution of the purchase agreement. With the second and third instalments of €1m each to be made once the environmental impact statement and the final mining permits for any project within any of the investigation permits acquired under the transaction were secured.

Atalaya said POM included the Alconchel copper-gold-iron project, which had an NI 43-101 compliant total indicated plus inferred resource of 23 Mt at 0.53% copper, 0.15 grams of gold per tonne and 11.2% iron.

It also included two advanced-stage gold and copper-gold exploration projects, Guijarro and Vicaria, and several drill-ready coincident geochemical and geophysical anomalies, all of which were located along the southern flank of the OMA.

Atalaya said it planned to conduct infill and step-out drilling at Alconchel, and additional exploration drilling at Pallares, Vicaria and Guijarro projects, among others.

The aim of that work would be to expand the known resources at Alconchel and advance the Pallares, Vicaria and Guijarro projects to the resource definition stage.

It said the POM exploration budget for 2022 would be up to €2m and, among other activities, would include around 10,000 metres of core drilling.

The Aguablanca nickel-copper-platinum group elements mine, now on care and maintenance, was located 15 kilometres southeast of POM, with the current owner of Aguablanca owning the remaining 49% interest in RNN.

“With this acquisition, Atalaya has secured a prominent land position in one of the most prospective and underexplored metallogenic belts in Western Europe,” said Atalaya chief executive officer Alberto Lavandeira.

“Its location, close to the Iberian Pyrite belt where our Riotinto copper mine and other exploration projects are currently advancing, will allow us to carry out aggressive exploration programmes in a cost and time efficient manner.

“Priority will be given to advance the Alconchel copper-gold-iron project because of its excellent exploration potential which underpins our geologists' belief that the current known resources can be increased significantly.”

Lavandeira said that for example, the Pallares Cu-Au discovery, 3.5 kilometres east of Alconchel and not included in the current resource, supported that thesis.

“This is an exciting time for Atalaya as it seeks new growth opportunities to build on its success at Riotinto and beyond.”

At 0814 GMT, shares in Atalaya Mining were up 1.84% at 402.25p.