Atalaya Mining Plc (AIM:ATYM) Proposed Placing to raise up to £39 million

Atalaya Mining plc (AIM:ATYM, TSX:AYM), the European mining and development company, today announces its intention to raise equity funding of up to approximately £39 million for the 15 Mtpa Expansion plan announced earlier this morning, through the issue of up to 23,335,910 new ordinary shares (the “Placing Shares”) at a price of 167 pence per share (the “Placing Price”).

The Placing is conditional on raising not less than £25,580,612 and the Company has received binding commitments and/or firm indications from certain major shareholders (and its largest institutional UK shareholder) to participate in the Placing by acquiring 16,717,732 shares at the Placing Price which represent 72 per cent. of the Placing Shares. These commitments and/or firm indications will be sufficient to meet the minimum funding required.

The balance of the Placing Shares will be offered to existing and new institutional investors who wish to participate in the Placing. The Placing is currently expected to conclude on or before 5:00 p.m. GMT on 8 December 2017, with admission of the Placing shares to trading on AIM becoming effective on or before 12 December 2017. A further announcement will be made following completion of the Placing.

The Placing will open with immediate effect following this Announcement. The number of Placing Shares, and allocations are at the discretion of the Bookrunners and a further announcement confirming these details will be made in due course. Members of the public are not entitled to participate in the Placing and none of the Placing Shares are being offered or sold in any jurisdiction where it would be unlawful to do so.

Atalaya has entered into a placing agreement (the “Placing Agreement”) with BMO Capital Markets Limited (“BMO”) and Canaccord Genuity Limited (“Canaccord”) who are acting as joint bookrunners in relation to the Placing (the “Bookrunners”). Pursuant to the Placing Agreement, each of BMO and Canaccord has agreed, in accordance with its terms, to use reasonable endeavours to place the Placing Shares with certain new and existing institutional and other investors. The Placing is not underwritten.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu with the existing ordinary shares including the right to receive all future dividends and distributions declared, made or paid by reference to a record date falling after their issue. If all the Placing Shares are placed, it would represent an increase of approximately 20 per cent. of the current issued ordinary share capital of the Company. The issue of the Placing Shares is pursuant to the authorities granted at the Company’s Annual General Meeting held on 13 July 2017.

The Company will apply for the Placing Shares to be issued on closing and to be admitted to trading on AIM (“Admission”). It is expected that settlement of these shares will take place and that trading will commence at 8:00 a.m. GMT on 12 December 2017. Application will also be made for approval to list the Placing Shares for trading on the Toronto Stock Exchange pursuant to Section 602.1 – Exemptions for Eligible Interlisted Issuers.

The Placing is conditional upon, inter alia, Admission becoming effective and the Placing Agreement between the Company and the Bookrunners becoming unconditional and not being terminated. Further details of the Placing Agreement can be found in the terms and conditions of the Placing contained in the Appendix to this Announcement (which forms part of this Announcement).

By choosing to participate in the Placing and by making a verbal offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement (including the Appendix) in its entirety and to be making such offer on the terms and subject to the conditions in this Announcement, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Your attention is drawn to the detailed terms and conditions of the Placing set out in the Appendix to this Announcement.

Rationale for the Placing and Use of Proceeds

· As separately announced today, the Board of Atalaya has approved the 15 Mtpa Expansion Project at Proyecto Riotinto (“15 Mtpa Expansion”) which will require an investment of €80.4 million.

· The 15 Mtpa Expansion comprises a modernisation of the processing plant with the installation of a new primary crushing system, a new SAG mill, additional flotation cells and concentrate handling installations as well as other site infrastructure.

· The 15Mtpa Expansion is designed to upgrade processing facilities with the ultimate goal of increasing copper production to approximately 50,000 – 55,000 tonnes per year, while also improving operational efficiencies, reducing maintenance requirements and lowering operating cash costs.

· Proceeds from the Placing will be utilised to fund initial capital expenditures related to the expansion project. It is anticipated that ground construction works will start during the first quarter of 2018.

· The balance of the capex required will be funded from other financing sources currently under discussion.

· This Placing should enable the Company to continue its growth strategy as it continues to build on the success of the commercial restart of Proyecto Riotinto in February 2016.

Current trading

On 16 November 2017, the Company released its Q3 Financial Statements which confirmed record production and significant revenue generation from the Company’s main operation, Proyecto Riotinto in Spain, as well as a strong balance sheet including increases in cash and copper concentrate inventories.

The Board remains confident that at current trading levels, the Company will deliver on the guidance provided and that it is on track to achieve market expectations.

Related Party Transaction

The four largest existing shareholders (“Key Shareholders”) have already committed to participate in the Placing, in accordance with their pre-existing contractual entitlement rights (as contained in the Subscription Agreement) as follows:

· Trafigura Beheer B.V. (“Trafigura”) has agreed to acquire 5,136,869 Placing Shares in accordance with its current pro-rata shareholding of approximately 22.0 per cent.;

· Yanggu Xiangguang Copper Co. Ltd (“XGC”) has agreed to acquire 5,117,705 Placing Shares in accordance with its current pro-rata shareholding of approximately 21.9 per cent.;

· Liberty Metals & Mining Holdings, LLC (“LMM”) has agreed to acquire 3,263,158 Placing Shares in accordance with its current pro-rata holding of approximately 13.98 per cent; and

· Orion Mine Finance (Master) Fund I LP (“Orion”) has agreed to acquire 1,800,000 Placing Shares, being part of its pro-rata entitlement.

The participation of the Key Shareholders in the Placing, is considered to be a related party transaction pursuant to AIM Rule 13 of the AIM Rules. The independent directors consider, having consulted with the Company’s Nominated Adviser, that the terms of the Key Shareholders’ participation in the Placing are fair and reasonable in so far as the Company’s shareholders are concerned.

Alberto Lavandeira, CEO of Atalaya said:

“I am very pleased to announce Atalaya’s Placing today. This will enable the ongoing development and expansion of our primary asset, Proyecto Riotinto, and allow us to increase the processing capacity to 15 Mtpa as we announced separately today. This has the potential for an increase in copper production to 50,000 – 55,000 tonnes per year. The strong interest indicated by our largest shareholders in participating in the Placing is testament to the strong project economics for the expansion, the incremental value that can be generated for our shareholders and the exciting future plans we have for the business”

This Announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 (“MAR”). Upon the publication of this Announcement, this inside information is now considered to be in the public domain.

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