Atalaya completes €125 million Tharsis Mining purchase

Atalaya Mining Copper (LON: ATYM) has acquired Tharsis Mining for €125 million in cash, adding two past-producing deposits west of its Riotinto complex in Spain's Iberian Pyrite Belt.

The FTSE 250 copper producer said on Wednesday it had completed the purchase of 100% of Tharsis Mining, a private Spanish company that owns the Tharsis and La Zarza projects in Huelva province. Consideration is €75 million paid on completion from existing cash resources and €50 million payable within 12 months, secured by a bank guarantee and accruing interest at 12-month EURIBOR plus 1.5%. Existing shareholders will not be diluted, Atalaya said, and it put pro-forma net cash after the upfront payment at more than €260 million. Certain identified legacy and contingent liabilities, estimated at about €7 million, will remain obligations of the acquired group. The deposits are expected to be sequenced beyond the development of Proyecto Touro, the company said.

Atalaya put the combined Mineral Resources at the two projects at about 227.7 million tonnes containing about 1.5 million tonnes of copper, 3.5 million tonnes of zinc, 1.4 million tonnes of lead, 7.5 million ounces of gold and 157.4 million ounces of silver. The open-pit components of that resource total about 199.2 million tonnes, which Atalaya says makes the projects, alongside Riotinto, the only large-scale deposits in the Iberian Pyrite Belt potentially mineable by open pit.

The combined total comprises CSA Global estimates of 120.7 million tonnes grading 0.59% copper at Tharsis, including 95.3 million tonnes in the measured and indicated categories, from October 2022, and 107 million tonnes grading 0.74% copper at La Zarza, including 67.8 million tonnes measured and indicated, from November 2023. Both estimates include inferred resources, the lowest-confidence category, and were reported under Canada's NI 43-101 standard and the CIM Definition Standards.

"While our near-term development priorities remain focused on Proyecto Touro and our existing operations, we believe that the Tharsis Project has the potential to become another important asset for Atalaya thanks to its scale, polymetallic resource base and opportunities to enhance future revenue generation," chief executive Alberto Lavandeira said in the company's statement.

Atalaya's flagship Riotinto complex includes the Cerro Colorado open pit and a 15-million-tonne-a-year processing plant. The company is advancing San Dionisio and Proyecto Masa Valverde in the same district and is working on a polymetallic circuit at Riotinto, which it says could provide learnings for Tharsis Mining. In Galicia, Atalaya has a phased earn-in agreement for up to 80% of Cobre San Rafael, which owns the brownfield Proyecto Touro copper project, and said it expects to begin development there soon.

Tharsis lies about 50 kilometres west of Riotinto and La Zarza about 25 kilometres west. Both were mined mainly for pyrite used to make sulphuric acid. Mining ceased at Tharsis in 2001, after 34 million tonnes of raw pyrite had been extracted, and at La Zarza in 1991, after about 40 million tonnes. Tharsis Mining, founded in 2018 and previously owned by members of the López Magdaleno family, drilled 77,536 metres at Tharsis in 2020-22 and 12,424 metres at La Zarza in 2022-23.

In 2023, CSA Global completed a preliminary economic assessment on Tharsis that focused on a 5-million-tonne-a-year open-pit operation and hydromet processing, prepared under CIM guidelines and reported in compliance with NI 43-101. Atalaya said its immediate focus will be to advance technical studies, key permitting steps and exploration across the acquired portfolio.