2025 Annual Results

19 March 2026

Atalaya Mining Copper, S.A.

("Atalaya" or the "Company")

2025 Annual Results

Strong financial results and robust balance sheet to support growth pipeline

Atalaya Mining (LSE: ATYM) is pleased to announce its audited consolidated financial results for the year ended 31 December 2025 ("FY2025" or the "Period").

Highlights

· Copper production of 11.6 kt in Q4 2025 and 51.1 kt in FY2025, which achieved the higher end of the FY2025 guidance range

· Cash Costs of US$2.62/lb in Q4 2025 and US$2.40/lb in FY2025, with reductions due to higher production, higher silver credits and lower offsite costs

· AISC of US$3.07/lb in Q4 2025 and US$2.90/lb in FY2025

· EBITDA of €41.4 million in Q4 2025 and €179.8 million in FY2025, resulting in strong free cash flow generation of €107.4 million in FY2025

· Final dividend of €0.065/sh proposed, for a full year total of €0.109/sh

· Robust net cash position to support the development of Atalaya's copper growth projects in Spain

Q4 and FY2025 Financial Results Summary

(1) Includes impact of Q4 2025 impairment related to the E-LIX project of €24.1 million.

(2) Consists of 2025 Interim Dividend (paid 10 October 2025) and proposed 2025 Final Dividend, which is subject to approval by shareholders at the Company's 2026 Annual General Meeting.

(3) Includes restricted cash and bank borrowings at 31 December 2025 and 31 December 2024.

Alberto Lavandeira, CEO, commented:

"2025 was a year of strong operational and financial delivery for Atalaya. We achieved copper production at the upper end of our guidance range, generated robust free cash flow and further strengthened our balance sheet. The Board has again proposed a final dividend. These results reflect disciplined cost control, improved operating performance at Riotinto and continued focus on efficiency across the business.

We continued to invest in the long‑term development of our assets, with sustained investment at Riotinto, further progress at Masa Valverde and Proyecto Touro, and encouraging exploration results, reinforcing the growth potential and optionality across our asset portfolio. At the same time, we maintained our commitment to sustainability, including targeted actions to address safety performance and a focus on continuous improvement in relation to energy and water efficiency.

The equity fundraise completed in January 2026 has further strengthened Atalaya's financial position and provides significant flexibility to advance our copper growth projects in Spain. Looking ahead, while the start of 2026 has been affected by challenging weather conditions at Riotinto, we remain confident in our production guidance for the year and in the medium‑term growth potential of our portfolio. With a strong balance sheet, high‑quality assets and favourable long‑term copper fundamentals, Atalaya is well positioned to deliver on our 2026 goals."

Results Presentations

Analyst and Investor Presentation

Alberto Lavandeira (CEO) and César Sánchez (CFO) will host a webcast for analysts and investors today at 9:00 GMT.

To access the SparkLive webcast, please visit:

Atalaya Mining 2025 Annual Results | SparkLive | LSEG

Investor Meet Company Presentation

In addition, the Company will provide a live presentation via the Investor Meet Company platform today at 11:00 GMT.

To access the Investor Meet Company presentation, please visit:

https://www.investormeetcompany.com/atalaya-mining-copper-sa/register-investor

Management will also answer questions that have been submitted via the Investor Meet Company dashboard.

Note to Readers

The financial information for the years ended 31 December 2025 and 2024 contained in this document does not constitute statutory accounts. The financial information for the years ended 31 December 2025 and 2024 has been extracted from the consolidated financial statements of Atalaya Mining Copper, S.A. for the year ended 31 December 2025 which have been approved by the directors on 18 March 2026. The auditor's report on those financial statements was unqualified.

FY2025 Select Sustainability Highlights

Atalaya is committed to maintaining high standards of sustainability across its various operating activities and focuses on making continuous improvements. While no life-threatening incidents occurred in FY2025, management implemented several targeted safety improvement initiatives in response to the increase in LTIFR.

For further information, please refer to Atalaya's 2025 Sustainability Report, which will be published in due course.

Q4 and FY2025 Operating Results Summary

(1) Represents the Cerro Colorado pit only.

Mining

Ore mined was 3.9 million tonnes in Q4 2025 (Q4 2024: 3.5 million tonnes) and 14.8 million tonnes in FY2025 (FY2024: 15.2 million tonnes).

Waste mined was 9.2 million tonnes in Q4 2025 (Q4 2024: 10.2 million tonnes) and 43.0 million tonnes in FY2025 (FY2024: 32.8 million tonnes). In addition, waste stripping activities continued at the San Dionisio area.

Processing

The plant processed ore of 4.1 million tonnes in Q4 2025 (Q4 2024: 3.8 million tonnes) and 16.6 million tonnes in FY2025 (FY2024: 15.9 million tonnes), which represents a new annual throughput record.

Copper grade was 0.33% in Q4 2025 (Q4 2024: 0.41%) and 0.39% in FY2025 (FY2024: 0.35%).

Copper recovery was 83.87% in Q4 2025 (Q4 2024: 78.15%) and 78.84% in FY2025 (FY2024: 83.06%).

Production

Copper production was 11,550 tonnes in Q4 2025 (Q4 2024: 12,078 tonnes) and 51,139 tonnes in FY2025 (FY2024: 46,227 tonnes), which achieved the higher end of the Company's FY2025 guidance range of 49,000 to 52,000 tonnes. In addition, silver contained in copper concentrate was 1.2 million ounces in FY2025 (FY2024: 1.1 million ounces).

On-site copper concentrate inventories were 4,050 tonnes at 31 December 2025 (30 September 2025: 8,092 tonnes).

Copper contained in concentrates sold was 11,823 tonnes in Q4 2025 (Q4 2024: 10,271 tonnes) and 53,487 tonnes in FY2025 (FY2024: 43,609 tonnes). Copper sales exceeded production during FY2025 due to the drawdown of on-site concentrate inventories.

Cash Costs and AISC Breakdown

(1) Represents the Cerro Colorado pit only.

Note: Some figures may not add up due to rounding.

Cash Costs were US$2.62/lb payable copper in Q4 2025 (Q4 2024: US$2.79/lb) and US$2.40/lb payable copper in FY2025 (FY2024: US$2.92/lb), with the annual decrease due to higher copper production, higher silver credits and lower treatment charges, partly offset by a stronger EUR/USD exchange rate which is a headwind for USD-denominated metrics.

AISC were US$3.07/lb payable copper in Q4 2025 (Q4 2024: US$3.28/lb) and US$2.90/lb payable copper in FY2025 (FY2024: US$3.26/lb), with the annual decrease due to the same factors that impacted Cash Costs, but partly offset by higher capitalised stripping at Cerro Colorado. AISC excludes investments in the tailings dam (consistent with prior reporting) and waste stripping at the San Dionisio area.

Q4 and FY2025 Financial Results Highlights

Income Statement

Revenues were €121.4 million in Q4 2025 (Q4 2024: €77.9 million) and €482.9 million in FY2025 (FY2024: €326.8 million), as a result of higher concentrate sales, higher realised copper prices and lower offsite costs.

Operating costs were €80.0 million in Q4 2025 (Q4 2024: €65.2 million) and €303.2 million in FY2025 (FY2024: €260.4 million), mainly due to higher mining and processing rates.

EBITDA was €41.4 million in Q4 2025 (Q4 2024: €12.7 million) and €179.8 million in FY2025 (FY2024: €66.4 million).

Profit after tax was €14.5 million in Q4 2025 (Q4 2024: €14.9 million) or 10.3 cents basic earnings per share (Q4 2024: 8.7 cents) and €85.4 million in FY2025 (FY2024: €32.6 million) or 60.8 cents basic earnings per share (FY2024: 22.6 cents). Profits were impacted by an impairment recognised in relation to the E-LIX project of €24.1 million in FY2025.

Cash Flow Statement

Cash flows from operating activities before changes in working capital were €43.3 million in Q4 2025 (Q4 2024: €11.7 million) and €72.5 million after working capital changes (Q4 2024: €11.1 million). For FY2025, cash flows from operating activities before changes in working capital were €188.0 million (FY2024: €66.4 million) and €192.5 million after working capital changes (FY2024: €53.4 million).

Cash flows used in investing activities were €25.3 million in Q4 2025 (Q4 2024: €16.6 million) and €85.1 million in FY2025 (FY2024: €66.1 million). Key investments in Q4 2025 included €1.8 million in sustaining capex, €1.1 million in capitalised stripping at Cerro Colorado, €12.2 million related to the San Dionisio area, €4.3 million to expand the tailings dam and €1.9 million for the solar plant.

Cash flows from financing activities were positive €11.4 million in Q4 2025 (Q4 2024: negative €19.2 million) and positive €13.4 million in FY2025 (FY2024: negative €57.3 million), as a result of temporary movements in the Company's working capital facilities.

Balance Sheet

The Company's balance sheet remains strong with consolidated cash and cash equivalents of €166.3 million as of 31 December 2025 (31 December 2024: €52.9 million).

Current and non-current borrowings were €44.3 million, resulting in a net cash position of €122.0 million as of 31 December 2025 (31 December 2024: €35.1 million).

Inventories of concentrate valued at cost were €3.8 million at 31 December 2025 (31 December 2024: €19.7 million). The total working capital surplus was €93.8 million at 31 December 2025 (31 December 2024: €44.7 million).

Subsequent to the end of the Period, the Company completed an equity offering that further strengthened its net cash position to approximately €264 million, as described below.

2025 Final Dividend

Atalaya has a dividend policy that seeks to provide capital returns to its shareholders while maintaining balance sheet strength and the ability to make investments in the Company's growth projects and potential external opportunities. Dividends are payable in two half-yearly instalments.

The Board of Directors has proposed a final dividend for FY2025 of €0.065 per ordinary share ("2025 Final Dividend"), which is equivalent to approximately US$0.075 or £0.056 per share. Payment of the 2025 Final Dividend is subject to shareholder approval at the Company's 2026 Annual General Meeting ("AGM"). Should it be approved, the 2025 Final Dividend, together with the 2025 Interim Dividend paid in October 2025, would result in a FY2025 Dividend of €0.109 per ordinary share, which compares to the FY2024 Dividend of €0.0637 (or US$0.07 or £0.0538). Further details on the timing of the potential payment of the 2025 Final Dividend will be provided ahead of the AGM.

Outlook for 2026

Production

In late January and early February 2026, rainfall at Riotinto was unusually high and resulted in difficult mining conditions as well as reduced access to certain areas in the Cerro Colorado pit. As a result, the copper grade processed in Q1 2026 to date has been below planned levels.

Copper production guidance for FY2026 continues to be 50,000 to 54,000 tonnes, with H2 2026 production to be approximately 10% higher than H1 2026 production. In addition, silver contained in copper concentrate is expected to be 0.9 to 1.1 million ounces in FY2026.

Operating Costs

During FY2025, the prices of key consumables and other costs were stable. However, ongoing conflicts including the recent events in Iran could disrupt supply chains and increase energy prices, which in turn can impact the costs of certain consumables. With respect to electricity prices, Spain benefits from a diversified energy mix including significant contributions from solar, wind, hydro and nuclear, while Atalaya's long-term PPA and solar plant are expected to reduce the impact of price volatility.

Cash Costs and AISC guidance for FY2026 are as follows:

· Cash Costs range of US$2.60 - 2.90/lb copper payable

· AISC range of US$3.10 - 3.40/lb copper payable

‒ Includes capitalised stripping costs of ~US$0.20/lb from Cerro Colorado

AISC guidance excludes investments in the tailings dam and ongoing waste stripping at the San Dionisio area, which are included in the non-sustaining capital investment guidance below.

Non-Sustaining Capital Investments

Atalaya is focused on advancing its copper growth projects in Spain in order to capitalise on strong copper market fundamentals. Development of Atalaya's project pipeline offers the potential to increase production, diversify the Company's sources of mined material, extend mine life and reduce unit costs.

The Company plans to make the following non-sustaining capital investments in FY2026:

(1) Remains subject to final Board approval

Additional investments, including related to Proyecto Touro and the Riotinto polymetallic circuit, could be approved once key permitting steps and engineering works are completed, as described below.

Exploration and Other Project Expenses

Atalaya continues to invest in exploration across its key projects and land packages in Spain, and through its earn-in agreements in Sweden.

In FY2026, exploration and other project expenses is expected to be €5 - 7 million. The primary focus will be to upgrade and expand resources at San Antonio, Proyecto Masa Valverde and Proyecto Touro, and test targets at Proyecto Ossa Morena, Proyecto Riotinto East and in Sweden.

Corporate Activities Update

Board of Directors

On 30 December 2025, the Company announced the appointment of Dr. Mike Armitage as an independent non-executive director with effect from 19 January 2026, replacing Steve Scott who stepped down from the Board on 31 December 2025. Several changes were subsequently made in relation to the composition of the Board's various committees.

Fundraise (Subsequent Event)

In January 2026, the Company completed an equity offering that raised gross proceeds of £130 million (or approximately €150 million) from new institutional investors, existing shareholders and eligible retail investors. The fundraise was significantly oversubscribed.

Proceeds from the fundraise will allow Atalaya to accelerate the development of its copper growth projects in Spain in order to capitalise on strong copper market fundamentals. Net proceeds from the fundraise, combined with the Company's net cash position at 31 December 2025, would result in a pro-forma net cash position of approximately €264 million.

Asset Portfolio Update

Proyecto Riotinto

Waste stripping activities at San Dionisio accelerated in the latter half of 2025, with total material mined of 5.8 million tonnes in Q4 2025 and 12.4 million tonnes in FY2025. In FY2026, 19 to 23 million tonnes of waste stripping is expected. San Dionisio represents a key component of Atalaya's strategy to increase copper production by sourcing higher-grade material from deposits throughout the Riotinto District to be blended with ore from Cerro Colorado.

At San Antonio, the polymetallic deposit located immediately east of the Cerro Colorado pit, the infill and step-out drilling programme made further progress in 2025 and will continue in 2026.

Atalaya continues to advance engineering works associated with processing plant modifications that would allow for the simultaneous treatment of polymetallic and copper ores at Riotinto, including optimising the layout of the new circuits within the existing plant footprint in order to minimise capital and operating costs.

E-LIX Phase I Plant

In Q4 2025, the E-LIX Phase I plant operated intermittently and produced zinc precipitates from copper-zinc concentrates, although at a variable and reduced capacity. All zinc precipitates that were produced were sold.

As E-LIX has demonstrated technological viability, Atalaya believes E-LIX has the potential to unlock value from complex material in the Iberian Pyrite Belt and beyond, provided it can demonstrate consistent operational and financial performance at scale.

However, the operation of the plant at reduced capacity had a negative impact on profitability, which affected Lain Technologies' financial position. Consequently, Atalaya has recognised an impairment of €24.1 million in FY2025 in relation to the E-LIX project, resulting in a remaining carrying value of €31.8 million, comprising tangible assets and the convertible loan with Lain Technologies.

Riotinto District - Proyecto Masa Valverde ("PMV")

In 2025, infill and extensional drilling at the Masa Valverde deposit continued and further infill drilling is planned for 2026. Focus will remain on the stockwork-style mineralisation, which is expected to be amenable for processing at the existing Riotinto facilities, and support Atalaya's initial focus on the Masa Valverde copper zones. Development of the access ramp is subject to final Board approval.

PMV has been granted the two key permits required for development - the Unified Environmental Authorisation (or in Spanish, Autorización Ambiental Unificada ("AAU")) and the exploitation permit.

Proyecto Touro

On 24 June 2024, Atalaya announced that Proyecto Touro, via its local entity Cobre San Rafael, was declared a strategic industrial project by the Council of the Xunta de Galicia ("XdG"). Under legislation of the Autonomous Community of Galicia, the status of strategic industrial project (or in Spanish, Proyecto Industrial Estratégico ("PIE")) acts to simplify the administrative procedures associated with the development of industrial projects and intends to substantially reduce permitting timelines.

This declaration highlights the XdG's commitment to promoting new investment that will benefit the region and also support the objectives of the European Union. As a result, Cobre San Rafael has applied to the second call for strategic projects launched by the European Commission, where the main objective is to ensure a secure and sustainable supply of critical raw materials for European industry.

The XdG is continuing its review according to the simplified procedures afforded to projects with PIE status. The public information period, which serves to inform the surrounding communities and organisations about the proposed project, concluded on 31 January 2025. Cobre San Rafael has addressed the feedback from the public information period, and most sectoral reports from the Xunta de Galicia have been finalised, with only two reports still pending. The Company has also responded to requests for additional information and is awaiting a small number of corresponding replies.

The Company continues to engage with the many stakeholders in the region and is restoring the water quality of the rivers around Touro by operating its water treatment plant. Recruitment initiatives in relation to its potential future workforce are ongoing.

Engineering, procurement and cost estimation works continue to be a major focus. In addition, infill and step-out drilling programmes will continue in 2026.

Proyecto Ossa Morena

Drilling is expected to begin at the Guijarro-Chaparral gold-copper project in the coming weeks.

Proyecto Riotinto East

Drilling will begin at the Cerro Negro and Peñas Blancas permits in the coming weeks.

Skellefte Belt and Rockliden (Sweden)

In November 2024, Atalaya announced that it had entered into two binding agreements with Mineral Prospektering i Sverige AB ("MPS") pursuant to which Atalaya can earn an initial 75% interest in two separate land packages in Sweden. The Skellefte Belt land package ("Skellefte Belt Project") and the Rockliden land package ("Rockliden Project") are located in two notable districts that host many large-scale volcanogenic massive sulphide ("VMS") deposits and mines owned by Boliden AB. Both regions are underexplored and could increase Atalaya's exposure to critical minerals in Europe.

Following the successful autumn drilling campaign, operations at both projects resumed in early January with three rigs on-site. Work will continue while ground conditions remain favourable. To date in 2026, over 5,000 metres of drilling have been completed, primarily focused on the Skellefte Belt Project.

Ground-based FLEM geophysical surveys targeting promising VTEM anomalies are progressing well and are proving highly effective at defining drill targets. Several of these new targets are currently being tested at the Kedträsk nr 1 licence.

With respect to the Skellefte Belt earn-in agreement, Atalaya has confirmed its election to proceed to Stage 1 Exploration Operations, following the fulfilment of its Minimum Expenditure commitments.

The person responsible for arranging release of this announcement on behalf of the Company is César Sánchez (CFO).

This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Contacts:

About Atalaya Mining Copper, S.A.

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" and Atalaya is a FTSE 250 Index constituent.

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. For further information, please visit www.atalayamining.com

ATALAYA MINING COPPER, S.A.

MANAGEMENT'S REVIEW AND

EXTRACT OF THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

Notice to Reader

The accompanying consolidated financial statements of Atalaya Mining Copper, S.A. have been prepared by and are the responsibility of Atalaya Mining Copper, S.A.'s management.

Introduction

This report provides an overview and analysis of the financial results of operations of Atalaya Mining Copper, S.A. and its subsidiaries ("Atalaya" and/or "Group"), to enable the reader to assess material changes in the financial position between 31 December 2024 and 31 December 2025 and results of operations for the three and twelve months ended 31 December 2025 and 2024.

This report has been prepared as of 18 March 2026. The analysis hereby included is intended to supplement and complement the audited consolidated financial statements and notes thereto ("Financial Statements") as at and for the period ended 31 December 2025, which will be released together with the Company's 2025 Annual Report.

Atalaya prepares its Annual Financial Statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU. The currency referred to in this document is the Euro, unless otherwise specified.

Forward Looking Statements

This report may include certain "forward-looking statements" and "forward-looking information" applicable under securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterised by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Assumptions upon which such forward-looking statements are based include all required third party regulatory and governmental approvals that will be obtained. Many of these assumptions are based on factors and events that are not within the control of Atalaya and there is no assurance they will be correct. Factors that cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in this report and other documents filed with the applicable securities regulatory authorities. Although Atalaya has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Atalaya undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

Non-Financial Information Statement

The Non-Financial Information Statement has been prepared in accordance with the requirements of Spanish Law 11/2018, of 28 December, on non-financial and diversity information (amending the Commercial Code, the revised text of the Capital Companies Act approved by Royal Legislative Decree 1/2010 of 2 July, and Law 22/2015 of 20 July on Auditing). This statement aims to provide stakeholders with relevant information on the Group's environmental, social, and governance performance.

For a comprehensive overview of Atalaya's ESG performance, including environmental initiatives, social impact, employee relations, human rights policies, and anti-corruption measures, please refer to the Atalaya Sustainability Report 2025, which is published separately and provides detailed disclosures aligned with international reporting standards such as the Global Reporting Initiative (GRI) standards.

1. Incorporation and summary of business

Atalaya Mining Plc was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered office was at 1 Lampousa Street, Nicosia, Cyprus.

The Company was first listed on the Alternative Investment Market (AIM) of the London Stock Exchange in May 2005.

Change of name and share consolidation (2015)

Following the Company's Extraordinary General Meeting ("EGM") on 13 October 2015, the change of name from EMED Mining Public Limited to Atalaya Mining Plc became effective on 21 October 2015. On the same day, the consolidation of ordinary shares came into effect, whereby all shareholders received one new ordinary share of nominal value Stg £0.075 for every 30 existing ordinary shares of nominal value Stg £0.0025. The Company's trading symbol became "ATYM".

On 29 April 2024, the Company was admitted to trading on the main market of the London Stock Exchange.

Cross-border conversion (re-domiciliation) (2024-2025)

On 10 January 2025, the Company successfully completed a cross-border conversion, resulting in its re-domiciliation from the Republic of Cyprus to the Kingdom of Spain. This process was carried out in accordance with the Company's strategic objectives to align its corporate structure with its operational base in Spain.

A cross-border conversion deed was executed on 23 December 2024 and subsequently filed with the Spanish Commercial Registry on 27 December 2024. Under Spanish corporate law, the re-domiciliation became legally effective from the date of registration with the Spanish Commercial Registry, i.e., 27 December 2024. However, for administrative and procedural purposes, the final formalities were completed on 9 January 2025, with the official public announcement being made on 10 January 2025. Following this change:

· Atalaya's corporate seat was transferred from Cyprus to Spain, and Atalaya became a Spanish public limited company (Sociedad Anónima) under the laws of the Kingdom of Spain;

· Atalaya's registered name changed from Atalaya Mining Plc to Atalaya Mining Copper, S.A.; and;

· Atalaya's registered address changed from 1, Lampousas Street, 1095 Nicosia, Cyprus to Paseo de las Delicias, 1, 3, 41001, Sevilla, Spain.

The Company's shares commenced trading under "Atalaya Mining Copper, S.A." on 10 January 2025 at 8:00 am (London time) and the nominal value of the Company's shares were also adjusted from 7.5p to €0.09 per share.

Principal activities

Atalaya is a European mining and development company. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in Spain, elsewhere in Europe and Latin America.

The Group has interests in four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group has an earn-in agreement to acquire certain investigation permits at Proyecto Riotinto East.

The Group also has earn-in agreements related two exploration projects in Sweden, the Skellefte Belt Project and the Rockliden Project, pursuant to agreements entered into in 2024 with Mineral Prospektering i Sverige AB.

Additional information about the Company is available at www.atalayamining.com.

2. Operating Review

Proyecto Riotinto

The following table presents a summarised statement of operations of Proyecto Riotinto for the three and twelve month periods ended 31 December 2025 and 2024.

(1) Represents the Cerro Colorado pit only.

There may be slight differences between the numbers in the above table and the figures announced in the quarterly operations updates that are available on Atalaya's website at www.atalayamining.com.

(1) Represents the Cerro Colorado pit only.

There may be slight differences between the numbers in the above table and the figures announced in the quarterly operations updates that are available on Atalaya's website at www.atalayamining.com.

Mining and Processing

Mining

Ore mined was 3.9 million tonnes in Q4 2025 (Q4 2024: 3.5 million tonnes) and 14.8 million tonnes in FY2025 (FY2024: 15.2 million tonnes).

Waste mined was 9.2 million tonnes in Q4 2025 (Q4 2024: 10.2 million tonnes) and 43.0 million tonnes in FY2025 (FY2024: 32.8 million tonnes). In addition, waste stripping activities continued at the San Dionisio area. 

Processing

The plant processed ore of 4.1 million tonnes in Q4 2025 (Q4 2024: 3.8 million tonnes) and 16.6 million tonnes in FY2025 (FY2024: 15.9 million tonnes), which represents a new annual throughput record.

Copper grade was 0.33% in Q4 2025 (Q4 2024: 0.41%) and 0.39% in FY2025 (FY2024: 0.35%).

Copper recovery was 83.87% in Q4 2025 (Q4 2024: 78.15%) and 78.84% in FY2025 (FY2024: 83.06%).

Production

Copper production was 11,550 tonnes in Q4 2025 (Q4 2024: 12,078 tonnes) and 51,139 tonnes in FY2025 (FY2024: 46,227 tonnes), which achieved the higher end of the Company's FY2025 guidance range of 49,000 to 52,000 tonnes. In addition, silver contained in copper concentrate was 1.2 million ounces in FY2025 (FY2024: 1.1 million ounces).

On-site copper concentrate inventories were 4,050 tonnes at 31 December 2025 (30 September 2025: 8,092 tonnes).

Copper contained in concentrates sold was 11,823 tonnes in Q4 2025 (Q4 2024: 10,271 tonnes) and 53,487 tonnes in FY2025 (FY2024: 43,609 tonnes). Copper sales exceeded production during FY2025 primarily due to the drawdown of on-site concentrate inventories during the year.

3. Operational Guidance

The forward-looking information contained in this section is subject to the risk factors and assumptions contained in the cautionary statement on forward-looking statements included in the Basis of Reporting. Should the Company consider the current guidance as no longer achievable, the Company will provide a further update.

Proyecto Riotinto operational guidance for 2026 is as follows:

(2) Represents the Cerro Colorado pit only. Waste guidance is 57 - 67 million tonnes when including the San Dionisio pit.

Production

In late January and early February 2026, rainfall at Riotinto was unusually high and resulted in difficult mining conditions as well as reduced access to certain areas in the Cerro Colorado pit. As a result, the copper grade processed in Q1 2026 to date has been below planned levels.

Copper production guidance for FY2026 continues to be 50,000 to 54,000 tonnes, with H2 2026 production to be approximately 10% higher than H1 2026 production. In addition, silver contained in copper concentrate is expected to be 0.9 to 1.1 million ounces in FY2026.

Operating Costs

During FY2025, the prices of key consumables and other costs were stable. However, ongoing conflicts including the recent events in Iran could disrupt supply chains and increase energy prices, which in turn can impact the costs of certain consumables. With respect to electricity prices, Spain benefits from a diversified energy mix including significant contributions from solar, wind, hydro and nuclear, while Atalaya's long-term PPA and solar plant are expected to reduce the impact of price volatility.

Cash Costs and AISC guidance for FY2026 are as follows:

· Cash Costs range of $2.60 - 2.90/lb copper payable

· AISC range of $3.10 - 3.40/lb copper payable

o  Includes capitalised stripping costs of ~$0.20/lb from Cerro Colorado

AISC guidance excludes investments in the tailings dam and ongoing waste stripping at the San Dionisio area, which are included in the non-sustaining capital investment guidance below.

Non-Sustaining Capital Investments

Atalaya is focused on advancing its copper growth projects in Spain in order to capitalise on strong copper market fundamentals. Development of Atalaya's project pipeline offers the potential to increase production, diversify the Company's sources of mined material, extend mine life and reduce unit costs.

The Company plans to make the following non-sustaining capital investments in FY2026:

(1) Remains subject to final Board approval

Additional investments, including related to Proyecto Touro and the Riotinto polymetallic circuit, could be approved once key permitting steps and engineering works are completed, as described below.

Exploration and Other Project Expenses

Atalaya continues to invest in exploration across its key projects and land packages in Spain, as well as its earn-in agreements in Sweden.

In FY2026, exploration and other project expenses is expected to be €5 - 7 million. The primary focus will be to upgrade and expand resources at San Antonio, Proyecto Masa Valverde and Proyecto Touro, and test targets at Proyecto Ossa Morena, Proyecto Riotinto East and in Sweden.

4. Financial Review

Income Statement

The following table presents a summarised consolidated income statement for the three and twelve month periods ended 31 December 2025 and 31 December 2024.

(1) Includes impairment recognised in 2025 relating to the E-LIX project and the reversal of a prior impairment in 2024 relating to Proyecto Touro. Refer to Notes 13 and 14, respectively

Three months financial review

Revenues for Q4 2025 amounted to €121.4 million, up from €77.9 million in Q4 2024. The increase was primarily due to higher concentrate sales volumes, higher realised copper price and lower TC/RC prices. Realised copper prices, excluding QPs, were US$5.10/lb in Q4 2025, compared with US$4.10/lb in Q4 2024. Including QPs, the realised price was approximately US$4.85/lb.

Copper contained in concentrates sold was 11,823 tonnes in Q4 2025 and 10,271 tonnes in Q4 2024.

Cost of sales for Q4 2025 totalled €72.5 million, compared to €59.6 million in Q4 2024. The increase was mainly due to a lower volume of concentrate stock at the end of the period and utilities costs. Cash costs stood at US$2.62/lb payable copper, down from US$2.79/lb in the prior-year quarter, benefiting from silver credits and lower offsite costs despite lower copper payable. All-in Sustaining Costs (AISC) for Q4 2025, excluding investments in the tailings dam, were US$3.07/lb payable copper, compared with US$3.28/lb in Q4 2024. The decrease was mainly due to lower capitalised stripping costs.

Sustaining capex for Q4 2025 amounted to €1.8 million, compared with €0.4 million in Q4 2024, primarily related to plant processing system improvements. Investment in the tailings dam project during Q4 2025 was €4.3 million (€4.0 million in Q4 2024). Investments in the San Dionisio area was €12.2 million. Capitalised stripping costs for Cerro Colorado for Q4 2025 were €1.1 million, lower than previous year (€6.2 million). The 50 MW solar plant construction capex totalled €1.9 million in Q4 2025.

Corporate expenses for Q4 2025 totalled €3.8 million, compared with €1.8 million in Q4 2024. These expenses include non-operating costs of the Cyprus office, corporate legal and consultancy fees, listing costs, and salaries for corporate officers and directors. Exploration expenses for the three-month period ended 31 December 2025 were €3.4 million, compared to €4.6 million in Q4 2024.

EBITDA for Q4 2025 amounted to €41.4 million, up from €12.7 million in Q4 2024. Depreciation and amortisation is below €2.9 million from €7.7 million due to the increase in Ore Reserves that were incorporated during the period. Net foreign exchange loss in Q4 2025 were €0.4 million, compared with a gain of €2.5 million in Q4 2024. Net financing income in Q4 2025 were a positive €0.7 million, compared with a positive of €0.6 million in the prior-year quarter.

Twelve months financial review

Revenues for FY 2025 totalled €482.9 million, compared with €326.8 million in FY 2024. The increase was mainly due to higher concentrate sales volumes with higher realised price, partially offset by lower concentrate grades.

Copper concentrate production for FY 2025 was 298,108 tonnes, up from 252,165 tonnes in FY 2024, while sales totalled 316,282 tonnes, up from 237,072 tonnes in the previous year. Inventories of concentrates at year-end stood at 4,050 tonnes, compared with 21,815 tonnes at 31 December 2024. Copper contained in concentrates sold was 53,487 tonnes in FY 2025 and 43,609 tonnes in FY2024.

Realised copper prices, excluding QPs, averaged US$4.49/lb in FY 2025, compared with US$4.19/lb in FY 2024. The Company did not enter into any hedging agreements during 2025.

Cost of sales for FY 2025 amounted to €288.0 million, up from €242.2 million in 2024. The increase in costs was mainly due to a negative impact from a lower year-end copper concentrate inventories and higher electricity costs. Cash costs for FY 2025 were US$2.40/lb payable copper, down from US$2.92/lb in 2024, mainly due to higher copper production, higher silver by-product credits and a reduction in offsite costs levels. AISC, excluding investment in the tailings dam, stood at US$2.90/lb payable copper in FY 2025, compared to US$3.26/lb in FY 2024, with the decrease driven by lower on cash costs and partially offset with higher stripping costs capitalised.

Sustaining capex for the twelve-month period ended 31 December 2025 totalled €4.1 million, compared with €4.0 million in FY 2024, mainly for plant processing system upgrades. Investment in the tailings dam expansion was €15.8 million, compared with €14.8 million in 2024. The 50 MW solar plant construction capex amounted to €2.6 million in FY 2025, San Dionisio area was €25.3 million, capitalised stripping costs for Cerro Colorado was €22.1 million, while investments in the E-LIX Phase I plant totalled €0.2 million (€2.1 million in 2024).

Corporate expenses for FY 2025 amounted to €10.5 million, up from €7.9 million in FY 2024 as the last year was reflecting lower overhead costs. Exploration expenses for the year totalled €8.4 million, compared with €7.9 million in 2024, main exploration work carried out at Sweden Projects and Proyecto Masa Valverde and Riotinto.

EBITDA for FY 2025 was €179.8 million, up from €66.4 million in FY 2024. Depreciation and amortisation for the year amounted to €47.5 million, compared with €43.6 million in 2024. Net impairment on assets for FY 2025 amounted to €21.4 million, compared with a net impairment reversal of €5.7 million in FY 2024 related to Proyecto Touro. The net foreign exchange loss for FY 2025 was €6.3 million, compared with a gain of €3.1 million in FY 2024.

Net finance costs for FY 2025 amounted to negative €2.3 million, compared with €0.1 million in FY 2024.

Net impairment on assets for FY 2025 amounted to €21.4 million, compared with a net impairment reversal of €5.7 million in FY 2024 related to Proyecto Touro. The 2025 impairment primarily relates to the E-LIX project. In addition, finance costs for the year include an impairment loss of €2.7 million recognised on loans granted in connection with the E-LIX project, reflecting management's reassessment of the recoverability of these balances.

Profit after tax for FY 2025 was €85.4 million, up from €32.6 million in FY 2024. Tax expenses amounted to €16.9 million, compared to €1.0 million in 2024. Earnings per share for FY 2025 was 60.8 cents, compared with 22.6 cents in FY 2024. Diluted EPS was 58.3 cents, up from 21.8 cents in the prior year.

Realised Copper Prices

The average prices of copper for 2025 and 2024 were:

Realised copper prices for the reporting period noted above have been calculated using payable copper and excluding both provisional invoices and final settlements of quotation periods ("QPs") together. The realised price during 2025, including quotation period adjustments, was approximately $4.45/lb.

Foreign Exchange

In FY2025, Atalaya recognised a foreign exchange loss of €6.3 million (FY2024 gain: €3.1 million). The foreign exchange loss mainly related to variances in EUR and USD conversion rates during the period as all sales are settled and occasionally held in USD.

The following table summarises the movement in key currencies versus the EUR:

During 2025 and 2024, Atalaya did not have any currency hedging agreements.

Financial Position

Assets

As of 31 December 2025, total assets amounted to €791.6 million, up from €675.9 million on 31 December 2024, representing an increase of €115.8 million. This increase is mainly driven by the growth in property, plant, and equipment, intangible assets, and cash and cash equivalents, partially offset by the reduction in inventories and trade receivables. The increase in cash and cash equivalents is primarily due to an increase of concentrate sold and higher copper price.

Non-current assets as of 31 December 2025 amounted to €550.4 million compared to €531.3 million in 2024. This includes property, plant, and equipment of €447.7 million in 2025, increasing from €409.0 million in 2024, intangible assets of €74.9 million in 2025 compared to €70.2 million in 2024, non-current trade and other receivables amounting to €1.1 million in 2025, down from €33.3 million in 2024, non-current financial assets remaining stable at €1.1 million, and deferred tax assets of €15.8 million, increasing from €15.1 million in 2024.

Current assets as of 31 December 2025 amounted to €241.2 million, increasing from €144.5 million in 2024. Within this category, inventories decreased significantly to €30.9 million from €49.2 million in 2024, while trade and other receivables increased to €41.1 million compared to €36.9 million in 2024. Tax refundable increased to €2.9 million from €0.3 million in 2024. Cash and cash equivalents significantly increased to €166.3 million, up from €52.9 million in 2024, mainly due to higher production and concentrate sold. The most notable change in current assets was the substantial increase in cash and cash equivalents, offset partially by the decrease in inventories, reflecting a lower level of concentrates in stockpile.

Liabilities

Non-current liabilities amounted to €52.4 million, decreasing from €57.5 million in 2024. The most significant component of non-current liabilities are provisions, which stood at €28.8 million in 2025, down from €29.3 million in 2024. In addition to the provision, non-current liabilities included borrowings of €5.7 million, a decrease from €10.9 million in 2024, lease liabilities of €3.8 million, up from €3.3 million in 2024, and trade and other payables remaining stable at €14.1 million, from €14.0 million in 2024.

Current liabilities as of 31 December 2025 stood at €147.3 million, compared to €99.8 million in 2024. This includes borrowings of €38.6 million, a significant increase from €6.9 million in 2024, trade and other payables of €106.1 million, up from €90.1 million in 2024, current tax liabilities of €0.1 million, decreasing from €1.4 million in 2024, current provisions of €1.8 million, down from €0.9 million in 2024, and lease liabilities of €0.6 million, which remained stable from €0.5 million in 2024.

Total liabilities increased to €199.8 million from €157.3 million in 2024, mainly due to the increase in short term borrowings.

Total equity as of 31 December 2025 amounted to €591.8 million, up from €518.5 million in 2024, reflecting an increase of €73.2 million. Share capital and share premium stood unchanged from 2024 at €12.7 million and €321.9 million. Accumulated profit stood at €166.1 million, up from €93.1 million in 2024. Non-controlling interests amounted to €1.9 million, compared to €2.2 million in 2024.

Overall, total equity and liabilities as of 31 December 2025 stood at €791.6 million, marking an increase from €675.9 million in the previous year.

Results

The Group's and Company's consolidated results are set out on the Consolidated Statements of Comprehensive Income.

Liquidity and Capital Resources

Atalaya monitors factors that could impact its liquidity as part of the Company's overall capital management strategy. Factors that are monitored include, but are not limited to, the market price of copper, foreign currency rates, production levels, operating costs, capital and administrative costs.

The following is a summary of Atalaya's cash position as at 31 December 2025 and 2024, and cash flows for the twelve months ended 31 December 2025 and 2024.

Liquidity Information

Unrestricted cash and cash equivalents as at 31 December 2025 increased to €166.3 million from €52.9 million at 31 December 2024. The increase in cash balances is primarily due to cash inflows during 2025, mainly related to higher sales with higher realised price. Cash balances are unrestricted and include balances at both the operational and corporate levels. The net increase in cash and cash equivalents for the year was €113.4 million, compared to a decrease of €68.1 million in 2024. This increase was driven by higher concentrate sold with better realised copper price and the use of credit facilities short term.

As of 31 December 2025, Atalaya reported a working capital surplus of €93.8 million, compared with a working capital surplus of €44.7 million at 31 December 2024. The increase in working capital surplus in 2025 was mainly driven by changes in current liabilities and cash balances. Cash increased significantly compared to the previous year, reflecting higher production and lower inventories in spite of higher investments in property, plant, and equipment, intangible assets as well as the repayment of borrowings and payment of dividends. At 31 December 2025, trade and other payables increased to €106.1 million, up from €90.1 million in 2024, while inventories also reduced to €30.9 million from €49.2 million in the prior year. Trade and other receivables increased to €41.1 million in 2025, compared to €36.9 million in 2024.

The Directors consider the current net cash position as well as the existing levels of the commodity prices and the current liquidity position to mitigate any potential financial risks linked to the liquidity position of the Company.

Overview of the Group's Cash Flows

In the twelve-month period ending 31 December 2025, cash and cash equivalents experienced a increase of €113.4 million. This increase resulted from cash generated by operating activities amounting to €192.5 million, offset by cash used in investing activities totalling €85.1 million and financing inflows amounting to €13.4 million, partially mitigated by a €7.4 million net negative foreign exchange impact.

Cash generated from operating activities before changes in working capital reached €188.0 million, compared with an EBITDA of €179.8 million. Atalaya increased its inventories by €17.3 million, while trade and other receivables decreased by €1.5 million, and trade and other payables increased by €11.9 million. The company incurred corporate tax payments totalling €21.0 million during this period.

Investing activities for the year 2025 amounted to €85.1 million, primarily directed towards capital expenditures related to ongoing projects, including plant improvements and infrastructure developments.

Financing activities in 2025 totalled positive €13.4 million, mainly driven by the repayment of borrowings amounting to €11.4 million, dividend payments of €10.1 million, share options expense of €2.5million and lease payments of €0.6 million, partially offset by proceeds from the issuance of share capital totalling €nil million and new borrowings of €37.9 million.

5. Alternative Performance Measures

Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Costs per pound of payable copper" "All-In Sustaining Cost" ("AISC") and "realised prices" in this report. Non-IFRS measures do not have any standardised meaning prescribed under IFRS, and therefore they may not be comparable to similar measures presented by other companies. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for indicators prepared in accordance with IFRS.

EBITDA includes gross sales net of penalties and discounts and all operating costs, excluding finance, tax, impairment, depreciation and amortisation expenses.

Cash Costs per pound of payable copper includes on-site cash operating costs, and off-site costs including treatment and refining charges ("TC/RC"), freight and distribution costs net of by-product credits. Cash Costs per pound of payable copper is consistent with the widely accepted industry standard established by Wood Mackenzie and is also known as the cash costs.

AISC per pound of payable copper includes the Cash Costs plus royalties and agency fees, expenditure on rehabilitations, stripping costs, exploration and geology costs, corporate costs, and sustaining capital expenditures.

Realised prices per pound of payable copper is the value of the copper payable included in the concentrate produced including the discounts and other features governed by the offtake agreements of the Group and all discounts or premiums provided in commodity hedge agreements with financial institutions, expressed in USD per pound of payable copper. Realised price is consistent with the widely accepted industry standard definition.

6. Risk Factors

Due to the nature of Atalaya's business in the mining industry, the Group is subject to various risks that could materially impact the future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to Atalaya. Readers are encouraged to read and consider the risk factors detailed in Atalaya's audited consolidated financial statements for the year ended 31 December 2025.

7. Critical accounting policies, estimates, judgements, assumptions and accounting changes

The preparation of Atalaya's Financial Statements in accordance with IFRS requires management to made estimates and assumptions that affected amounts reported in the Financial Statements and accompanying notes. There is a full discussion and description of Atalaya's critical accounting estimates and judgements in the audited financial statements for the year ended 31 December 2025.

8. Other Information

Additional information about Atalaya Mining Copper, S.A. is available at www.atalayamining.com 

Consolidated financial statements on subsequent pages

By Order of the Board of Directors

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2025

The notes on subsequent pages are an integral part of these consolidated financial statements.

Consolidated Statement of Financial Position

As at 31 December 2025

The notes on subsequent pages are an integral part of these consolidated financial statements.

The consolidated financial statements were authorised for issue by the Board of Directors on 18 March 2026 and were signed on its behalf.

Consolidated Statement of Changes in Equity

for the year ended 31 December 2025

(1) Refer to Note 23

The notes on subsequent pages are an integral part of these consolidated financial statements

Consolidated Statement of Cash Flows

for the year ended 31 December 2025

The notes on subsequent pages are an integral part of these consolidated financial statements.

Notes to the consolidated financial statements

1. Incorporation and summary of business

Atalaya Mining Plc was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered office was at 1 Lampousa Street, Nicosia, Cyprus.

The Company was first listed on the Alternative Investment Market (AIM) of the London Stock Exchange in May 2005.

Change of name and share consolidation (2015)

Following the Company's Extraordinary General Meeting ("EGM") on 13 October 2015, the change of name from EMED Mining Public Limited to Atalaya Mining Plc became effective on 21 October 2015. On the same day, the consolidation of ordinary shares came into effect, whereby all shareholders received one new ordinary share of nominal value Stg £0.075 for every 30 existing ordinary shares of nominal value Stg £0.0025. The Company's trading symbol became "ATYM".

On 29 April 2024, the Company was admitted to trading on the main market of the London Stock Exchange.

Cross-border conversion (re-domiciliation) (2024-2025)

On 10 January 2025, the Company successfully completed a cross-border conversion, resulting in its re-domiciliation from the Republic of Cyprus to the Kingdom of Spain. This process was carried out in accordance with the Company's strategic objectives to align its corporate structure with its operational base in Spain.

A cross-border conversion deed was executed on 23 December 2024 and subsequently filed with the Spanish Commercial Registry on 27 December 2024. Under Spanish corporate law, the re-domiciliation became legally effective from the date of registration with the Spanish Commercial Registry, i.e., 27 December 2024. However, for administrative and procedural purposes, the final formalities were completed on 9 January 2025, with the official public announcement being made on 10 January 2025. Following this change:

· Atalaya's corporate seat was transferred from Cyprus to Spain, and Atalaya became a Spanish public limited company (Sociedad Anónima) under the laws of the Kingdom of Spain;

· Atalaya's registered name changed from Atalaya Mining Plc to Atalaya Mining Copper, S.A.; and;

· Atalaya's registered address changed from 1, Lampousas Street, 1095 Nicosia, Cyprus to Paseo de las Delicias, 1, 3, 41001, Sevilla, Spain.

The Company's shares commenced trading under "Atalaya Mining Copper, S.A." on 10 January 2025 at 8:00 am (London time) and the nominal value of the Company's shares were also adjusted from 7.5p to €0.09 per share.

Principal activities

Atalaya is a European mining and development company. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in Spain, elsewhere in Europe and Latin America.

The Group has interests in four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group has an earn-in agreement to acquire certain investigation permits at Proyecto Riotinto East.

The Group also has earn-in agreements related two exploration projects in Sweden, the Skellefte Belt Project and the Rockliden Project, pursuant to agreements entered into in 2024 with Mineral Prospektering i Sverige AB.

Additional information about the Company is available at www.atalayamining.com.

Proyecto Riotinto

The Company owns and operates through a wholly owned subsidiary, "Proyecto Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the Andalusia region of Spain, approximately 65 km northwest of Seville. A brownfield expansion of this mine was completed in 2019 and successfully commissioned by Q1 2020.

Proyecto Touro

The Group initially acquired a 10% stake in Cobre San Rafael, S.L. ("CSR"), the owner of Proyecto Touro, as part of an earn-in agreement, which was designed to enable the Group to acquire up to 80% of the copper project. Proyecto Touro is located in Galicia, north-west Spain, and is currently in the permitting process.

In July 2017, the Group announced that it had executed the option to acquire 10% of the share capital of CSR, a wholly owned subsidiary of Explotaciones Gallegas S.L. This acquisition was part of an earn-in agreement, structured in four phases, allowing the Group to progressively increase its stake in CSR up to 80%:

- Phase 1 - The Group paid €0.5 million to secure the exclusivity agreement and committed to funding up to a maximum of €5.0 million to support the permitting and financing stages.

- Phase 2 - Upon receipt of permits, the Group is required to pay €2.0 million to acquire an additional 30% interest in the project (cumulative 40%).

- Phase 3 - Once development capital is secured and construction commences, the Group is required to pay €5.0 million to acquire an additional 30% interest in the project (cumulative 70%).

- Phase 4 - Upon declaration of commercial production, the Group purchases an additional 10% interest (cumulative 80%) in exchange for a 0.75% Net Smelter Return royalty, with a buyback option.

The Agreement was structured to ensure that each phase and corresponding payment would only occur once the project was de-risked, permitted, and operational.

On 24 June 2024, Atalaya announced that Proyecto Touro, via its local entity Cobre San Rafael, was declared a strategic industrial project by the Council of the Xunta de Galicia ("XdG"). Under legislation of the Autonomous Community of Galicia, the status of strategic industrial project (or in Spanish, Proyecto Industrial Estratégico ("PIE")) acts to simplify the administrative procedures associated with the development of industrial projects and intends to substantially reduce permitting timelines.

This declaration highlights the XdG's commitment to promoting new investment that will benefit the region and also support the objectives of the European Union. Copper is considered a strategic raw material by the EU, and this project has the potential to become a new source of sustainable European copper production.

The XdG is continuing its review according to the simplified procedures afforded to projects with PIE status. The public information period, which serves to inform the surrounding communities and organisations about the proposed project, concluded on 31 January 2025. Cobre San Rafael is currently focused on analysing and responding to the feedback submitted during the public information period and assessing the sectoral reports issued by the various departments of the XdG.

Following the declaration of Proyecto Touro as a strategic industrial project in June 2024 and subsequent progress in the permitting process, the Group reassessed the probability of completion of phases 2, 3 and 4 under the earn-in agreement. As a result of that reassessment, an intangible asset of €16.5 million was recognised in 2024 in accordance with the Group's policy on contingent payments (Note 2.31), together with the corresponding contingent liabilities (Note 26).

In accordance with the Group's policy on non-controlling interests (Note 2.3), 20% of this intangible asset was attributed to non-controlling interests.

During 2024, the Group also reversed an impairment previously recognised in 2019 in respect of Proyecto Touro (Note 14).

As at 31 December 2025, the permitting process continues under the simplified administrative framework granted by the strategic industrial project status. The Company has submitted the required sectoral reports and is awaiting the remaining responses from the relevant authorities. The Company continues to engage constructively with the Xunta de Galicia in relation to the expected timeline for completion of the administrative procedures.

In parallel, engineering and preparatory activities have progressed during the year, supporting the potential future development of the project. Drilling programmes have continued as planned, and the Company remains engaged with local stakeholders and continues to operate its water treatment plant in the area.

Proyecto Masa Valverde

On 21 October 2020, the Company announced that it entered into a definitive purchase agreement to acquire 100% of the shares of Cambridge Mineria España, S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which fully owns the Masa Valverde polymetallic project located in Huelva (Spain). Under the terms of the agreement Atalaya will make an aggregate €1.4 million cash payment in two instalments of approximately the same amount. The first payment is to be executed once the project is permitted and second and final payment when first production is achieved from the concession.

In November 2023, the exploitation permit for the Masa Valverde and Majadales deposits was officially granted. Following this milestone, in January 2024, the Company made a payment of €0.7 million as part of the process associated with the granted permits.

During 2025, infill and extensional drilling continued at the Masa Valverde deposit, with two rigs active during the year and additional geotechnical drilling completed. Drilling has primarily focused on stockwork-style mineralisation, which is expected to be amenable for processing at the existing Riotinto facilities and supports the Company's initial focus on the Masa Valverde copper zones. Further infill drilling is planned for 2026.

Masa Valverde has been granted the two key permits required for development, the AAU and the exploitation permit. Development of the access ramp is subject to final Board approval.

Proyecto Ossa Morena

In December 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owned 9 investigation permits. The acquisition also provided a 100% interest in three investigation permits that are also located along the Ossa-Morena Metallogenic Belt. In Q3 2022, Atalaya increased its ownership interest in POM to 99.9%, up from 51%, following completion of a capital increase that will fund exploration activities. During 2022 Atalaya rejected 8 investigation permits.

Under the terms of the agreement, Atalaya will pay a total of €2.5 million in cash in three instalments and grant a 1% net smelter return ("NSR") royalty over all acquired permits. The first payment of €0.5 million was made following execution of the purchase agreement. The second and third instalments of €1 million each will become payable upon receipt of the environmental impact statement ("EIS") and the final mining permits for any project within the acquired investigation permits. These outstanding instalments are disclosed as a non-current payable to the sellers (Note 26).

During 2025, exploration activities continued at the Alconchel-Pallares copper-gold project. A step-out drilling programme was underway during the year, and three drill holes were completed in the third quarter of 2025. Drilling is expected to commence at the Guijarro-Chaparral gold-copper project in the coming weeks.

Proyecto Riotinto East

In December 2020, Atalaya entered into a Memorandum of Understanding with a local private Spanish company to acquire a 100% beneficial interest in three investigation permits (known as Peñas Blancas, Cerro Negro and Herreros investigation permits), which cover approximately 12,368 hectares and are located immediately east of Proyecto Riotinto. After a short drilling campaign, the Los Herreros investigation permit was rejected in June 2022. . Proyecto Riotinto East consists of the remaining two investigation permits, Peñas Blancas and Cerro Negro, totalling 10,016 hectares.

During 2025, exploration activities progressed across the East Belt extension. Gravimetric ground surveys were completed to better define future drill targets, and soil geochemistry works were finalised at selected areas. As a result of these programmes, several coincident gravity and geochemical targets were outlined at Cerro Negro and Peñas Blancas. Drilling is expected to commence at the Cerro Negro and Peñas Blancas permits in the coming weeks.

Skellefte Belt Project and Rockliden Project

In November 2024, the Group entered into agreements with Mineral Prospektering i Sverige AB in relation to the Skellefte Belt Project and the Rockliden Project, both situated in well-established volcanogenic massive sulphide districts renowned for their mineral resource potential. In 2025, a total of €4.3 million (2024: €1.2 million) in funding was provided to MPS in relation to preparatory work for the planned winter drilling campaigns and to compensate for certain past expenditures incurred by MPS (Note 15). As these projects remain in the early exploration stage and are still far from obtaining operating mining permits, these impacts have been recorded directly in the comprehensive income statement for the financial year.

Overview of assets by mining projects

The following table presents the allocation of assets across the Company's mining operations, distinguishing between mining assets, which include exploration, development, and production-related investments, and non-mining assets, covering infrastructure, equipment, and other supporting assets.

* €22.1m related to E-LIX Project, see note 13.

Composition of the Group

The name and shareholding of the entities included in the Group in these financial statements are:

Notes

(1) Cobre San Rafael, S.L. is the entity which holds the mining rights of the Proyecto Touro. The Group has control in the management of Cobre San Rafael, S.L., including one of the two Directors, management of the financial books.

(2) The effective proportion of shares held as at 31 December 2025 and 31 December 2024 remained unchanged.

(3) Recursos Cuenca Minera is a joint venture with ARM, see note 16.

2. Summary of material accounting policies

The principal accounting policies applied in the preparation of these consolidated and company financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

(a) Overview

The consolidated financial statements of Atalaya Mining Copper, S.A. (the "Parent Company") and its subsidiaries (collectively, the "Group") have been formulated in accordance with the International Financial Reporting Standards adopted by the European Union ("EU-IFRS") and other applicable provisions of the financial reporting regulatory framework, in particular the Commercial Code and the Capital Companies Act, in order to show a true and fair view of the Group's consolidated equity and consolidated financial position as of December 31, 2025 and of the consolidated financial performance, its consolidated cash flows and changes in consolidated equity for the year ended on that date.

EU-IFRS comprises the standards issued by the International Accounting Standards Board ("IASB") approved by the EU for application by listed companies.

The definition of a Public-Interest Entity ("PIE") is set out in Article 2.13 of Directive 2006/43/EC, as amended by Article 1 of Directive 2014/56/EU, which states that the following are considered to be EIPs: (a) entities governed by the law of a Member State whose transferable securities are admitted to trading on a regulated market in any Member State; b) credit institutions, as defined in point (1) of Article 3(1) of Directive 2013/36/EU; (c) insurance undertakings within the meaning of Article 2 (1) of Directive 91/674/EEC; and (d) entities designated by Member States as public-interest entities. As the Parent Company does not fall into any of the above categories, it is not considered a PIE.

The Directors of the Parent Company estimate that the consolidated annual accounts for the financial year 2025, which have been prepared on 18 of March 2026, will be approved by the General Meeting of Shareholders without any modification.

The consolidated financial statements are presented in euros (€), rounding all amounts to the nearest thousand (€'000), unless otherwise indicated.

The preparation of the consolidated financial statements in accordance with EU-IFRS requires the application of relevant accounting estimates and the making of judgments, estimates and assumptions in the process of applying the Group's accounting policies. The aspects that have involved a greater degree of judgment, complexity or in which the assumptions and estimates are significant for the preparation of the consolidated financial statements are disclosed in Note 3.3.

Likewise, although the estimates made by the Directors of the Parent Company have been calculated based on the best information available as of December 31, 2025, it is possible that events that may take place in the future may require their modification in the coming years. The effect on the consolidated financial statements of the modifications that, if any, arise from the adjustments to be made during the coming years would be recognized prospectively.

(b) Going concern

These consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will continue to operate and meet its financial obligations in the normal course of business.

The Directors have assessed the Group's financial position, operational performance, and external market conditions for a period of at least 12 months from the date of approval of these financial statements. This assessment considered: Copper price volatility and foreign exchange fluctuations, given their direct impact on revenue and profitability; production levels and cost profile, ensuring the Group maintains operational efficiency and financial resilience; capital expenditure and ongoing development projects, aligning with the Group's strategic and operational needs; liquidity and borrowing facilities, confirming the Group's ability to meet financial obligations as they fall due; energy cost stability, supported by the commissioning of a solar power plant and a long-term PPA to mitigate electricity price volatility, regulatory and geopolitical risks, ensuring compliance with evolving industry regulations and addressing potential global market disruptions; copper head grade variability, with sensitivity analyses conducted to evaluate the impact of potential fluctuations in ore quality.

Following a comprehensive review of forecasts, financial resources, and stress-tested downside scenarios, the Directors have concluded that there are no material uncertainties that could reasonably be expected to cast significant doubt on the Group's ability to continue operating as a going concern. Accordingly, the going concern basis of accounting remains appropriate for the preparation of these consolidated financial statements.

The Directors and Management will continue to monitor external factors, including market conditions and regulatory developments, to ensure the Group remains well-positioned to navigate potential challenges.

2.2 Changes in accounting policy and disclosures

The Group has adopted all the new and revised EU-IFRSs which are relevant to its operations and are effective for accounting periods commencing on or after 1 January 2025.

IAS 21 (Modification) - Absence of interchangeability

The IASB has amended IAS 21 to introduce guidance for determining whether a currency is exchangeable into another currency and, where it is not, how to determine the appropriate spot exchange rate to apply. The amendments require an entity to assess exchangeability at the measurement date and, if a currency is deemed not to be exchangeable, to estimate a spot exchange rate that reflects the rate at which an orderly exchange transaction would take place between market participants under prevailing economic conditions.

The adoption of these amendments has not had a material impact on the Group's financial statements or accounting policies, as the Group operates in jurisdictions where currencies are freely exchangeable and observable market exchange rates are available.

Standards issued but not yet in force and not yet implemented by the Group

The Group will apply the following amendments adopted by the European Union from 1 January 2026.

IFRS 9 (Amendment) and IFRS 7 (Amendment) - Classification and Measurement of Financial Instruments

The main modifications include:

- Clarification of the date of recognition and derecognition of specific financial assets and liabilities, with a new exception for certain liabilities settled through electronic cash transfer systems.

- Additional guidance on how to assess whether a financial asset meets the criterion of only principal and interest payments on the outstanding principal amount (UPPI).

- New disaggregation requirements for financial instruments with contractual terms that may alter cash flows, including ESG-linked financial instruments.

- Update of the reporting requirements for equity instruments measured at fair value through other comprehensive income (FVOCI).

While the amendments relating to the SPPI criterion are primarily relevant to financial institutions, the changes concerning recognition, ESG-linked financial instruments and enhanced disclosure requirements are applicable to all entities.

These amendments will enter into force from 1 January 2026 and will be allowed to be adopted early. The amendments may introduce additional disclosure requirements but are not expected to have a significant impact on the Group's recognition and valuation of financial instruments.

IFRS 9 (Amendment) and IFRS 7 (Amendment) - Contracts relating to nature-dependent electricity

These amendments address the accounting for electricity supply contracts that depend on natural conditions (for example, wind or solar energy), enabling entities to reflect such contracts more accurately in their financial statements. The key changes include:

- Clarification of the "own use" exemption for electricity contracts.

- The ability to apply hedge accounting to certain contracts when they are designated as hedging instruments.

- New disaggregation requirements to improve transparency regarding the financial impact of such contracts.

These amendments will apply from 1 January 2026. They may require additional disclosures, particularly if the Group enters into renewable energy supply contracts but are not expected to have a material impact on the Group's recognition or measurement principles.

IFRS Annual Improvements - Volume 11

The IASB's Annual Improvements process addresses minor amendments to IFRS Standards in order to eliminate inconsistencies and improve clarity. Volume 11 includes amendments to the following standards:

IFRS 1 - First-time Adoption of IFRS: improved references and drafting.

IFRS 7 - Financial Instruments: Disclosures: simplification of cash flow disclosure requirements.

IFRS 9 - Financial Instruments: elimination of an inconsistency between IFRS 9 and IFRS 15 relating to the initial measurement of trade receivables, and clarification of how a lessee accounts for the derecognition of a lease liability in accordance with paragraph 23 of IFRS 9.

IFRS 10 - Consolidated Financial Statements: improvements to structure and wording.

IAS 7 - Statement of Cash Flows: clarification that, under the indirect method, the starting point should be profit from operating activities rather than profit or loss for the year.

These amendments will become effective on 1 January 2026. Their impact is expected to be limited, as they primarily clarify existing guidance rather than introduce significant changes.

Standards, Interpretations, and Amendments to Existing Standards Not Yet Endorsed by the European Union or Not Available for Early Adoption

As at the date of preparation of these consolidated financial statements, the IASB and the IFRS Interpretations Committee have issued the following standards, amendments and interpretations that have not yet been adopted by the European Union and therefore cannot yet be applied by the Group. The Group has, however, assessed their potential impact on its consolidated financial statements once they become applicable.

IFRS 18 - Presentation and Disclosure in Financial Statements

IFRS 18 is a recently issued standard that replaces IAS 1 (Presentation of Financial Statements), while retaining many of its underlying principles. However, it introduces significant changes, including:

- A structured format for the income statement, requiring specific totals and subtotals and categorising items into five sections: operating, investing, financing, income taxes and discontinued operations.

- Disclosure requirements for management-defined performance measures presented in the financial statements.

- Enhanced aggregation and disaggregation principles applicable to both the primary financial statements and the notes.

Although IFRS 18 does not affect recognition or measurement principles, it may change the presentation of operating results.

This standard will become effective from 1 January 2027, subject to adoption by the European Union, and will apply to interim financial statements. Retrospective application is required and early adoption is permitted.

Management's preliminary assessment indicates that IFRS 18 will affect the presentation and disclosures in the Group's consolidated financial statements but will not impact the recognition or measurement principles applied by the Group.

IFRS 19 - Non-Publicly Accountable Subsidiaries: Disclosures

IFRS 19 is a new standard designed for subsidiaries without public accountability whose parent prepares consolidated financial statements in accordance with IFRS. It reduces disclosure requirements for such subsidiaries while maintaining IFRS recognition and measurement principles.

This voluntary standard applies to subsidiaries preparing consolidated or individual annual financial statements, provided that local regulations permit its use.

In the case of Spanish groups, its application primarily relates to foreign subsidiaries that apply IFRS in their individual financial statements. Subsidiaries that currently apply IFRS for SMEs or local GAAP in their statutory financial statements would not need to prepare a separate set of accounts for group reporting purposes if they adopt IFRS 19.

IFRS 19 will become effective from 1 January 2027. Early adoption is permitted, subject to approval by the European Union.

This standard is not expected to have a material impact on the Group's consolidated financial statements, as its applicability depends on the status of subsidiaries and local regulatory requirements.

IFRS 10 (Amendment) and IAS 28 (Amendment) - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

These amendments clarify the accounting treatment of sales and contributions of assets between an investor and its associate or joint venture, depending on whether the transferred non-cash assets constitute a "business" under IFRS 3. Where the assets qualify as a business, the investor recognises the full gain or loss on the transaction. Otherwise, only the portion of the gain or loss attributable to other investors is recognised.

These amendments were originally intended to apply prospectively from 1 January 2016. However, at the end of 2015, the IASB deferred their effective date indefinitely, pending a broader review of the accounting for associates and joint ventures. As the amendments remain deferred indefinitely and have not been adopted by the European Union, the Group has adopted the following accounting policy in accordance with IAS 8: the sale or contribution of assets to an associate or joint venture is accounted for by recognising only the portion of the gain or loss attributable to other investors.

2.3 Subsidiaries

Subsidiaries, including structured entities, are those entities over which the Parent Company, directly or indirectly through its subsidiaries, exercises control. The Parent Company controls a subsidiary when, through its involvement with the entity, it is exposed, or has rights, to variable returns and has the ability to affect those returns through the power it exercises over the entity. The Parent Company has power when it holds substantive rights that are currently exercisable and provide the ability to direct the relevant activities. The Parent Company is exposed, or has rights, to variable returns from its involvement with a subsidiary when the returns it obtains may vary as a result of the economic performance of the entity.

A structured entity is an entity designed in such a way that voting rights or similar rights are not the dominant factor in determining who controls the entity, for example where potential voting rights relate solely to administrative activities and those activities are governed by contractual arrangements.

Control is typically achieved through ownership of more than 50% of the voting rights, whether directly or indirectly. However, control may also be exercised over another entity even when holding less than half of the voting rights, as is the case of Cobre San Rafael, S.L., as explained in Note 3.3.

The Group reassesses whether it continues to control its subsidiaries whenever facts and circumstances indicate that one or more of the elements of control may have changed.

The income, expenses and cash flows of subsidiaries are included in the consolidated financial statements from the date of acquisition, being the date on which the Group effectively obtains control. Subsidiaries are excluded from consolidation from the date on which control is lost.

Transactions and balances between Group companies, together with any unrealised gains or losses, are eliminated in the consolidation process. However, unrealised losses are considered as an indicator of impairment of the assets transferred.

The accounting policies of subsidiaries have been aligned with those of the Group for transactions and other events of a similar nature occurring in similar circumstances.

The annual accounts or financial statements of subsidiaries used in the consolidation process are prepared as at the same reporting date and for the same reporting period as those of the Parent Company.

Where a reduction in the Group's interest in a subsidiary results in a loss of control, the Group recognises a gain or loss for the difference between the consideration received, plus the fair value of any retained investment in the entity, plus the carrying amount of non-controlling interests, and the carrying amount of the consolidated net assets. The cumulative amount recognised in other comprehensive income relating to the subsidiary is reclassified in full to profit or loss or to reserves, depending on its nature. The consolidated net assets include goodwill, to the extent that the entity disposed of constitutes a business. If the entity disposed of constitutes a business that formed part of a cash-generating unit or a group of cash-generating units to which goodwill had been allocated, such goodwill is allocated between the portion disposed of and the portion retained on the basis of their relative fair values and recoverable amounts, respectively.

Where the Group's ownership interest in a subsidiary changes but control is retained, the transaction is accounted for as an equity transaction. Accordingly, no new acquisition cost arises on increases in ownership and no gain or loss is recognised on reductions. Instead, the difference between the consideration paid or received and the carrying amount of non-controlling interests is recognised directly in reserves attributable to the shareholders of the Parent Company, without prejudice to the reclassification of consolidation reserves and the reallocation of other comprehensive income between the Group and non-controlling interests. Upon a reduction in the Group's interest in a subsidiary, non-controlling interests are recognised at their proportionate share of the consolidated net assets, including goodwill.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the transferred assets, liabilities incurred by the former owners of the acquiree, and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the acquisition date. The Group recognised any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of financial position.

If there are contractual arrangements that determine the attribution of earnings, such as a profit-sharing agreement or the attribution specified by the arrangement the non-controlling interest will be presented accordingly. Otherwise, the relative ownership interests in the entity should be used if the parent's ownership and the non-controlling interest's ownership in the assets and liabilities are proportional.

When contractual profit-sharing arrangement changes over time, the earnings allocation to the non-controlling interest should be based on its present entitlement.

(a) Acquisition-related costs are expensed as incurred

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquire is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 in profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Gains and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(c) Disposal of subsidiaries

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(d) Associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee (generally accompanying a shareholding of between 20% and 50% of the voting rights) but is not control or joint control over those policies.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

Investments in associates or joint ventures are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The Group's investment in associates or joint ventures includes goodwill identified on acquisition.

If the ownership interest in an associate or joint venture is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group's share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income, with a corresponding adjustment to the carrying amount of the investment. When the Group share of losses in an associate or a joint venture equals or exceeds its interest in the associate or joint venture, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate or the joint venture.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate or the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or the joint venture and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of associates' or joint ventures' in the income statement.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate or joint venture are recognised in the Group's consolidated financial statements only to the extent of unrelated investors' interests in the associates or the joint ventures. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in associates or joint ventures are recognised in the income statement.

(e) Functional currency

Functional and presentation currency items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in Euro which is the Company's functional and presentation currency.

Determination of functional currency may involve certain judgements to determine the primary economic environment and the parent entity reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

Foreign currency transactions are translated into the functional currency using the spot exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the income statement.

Monetary assets and liabilities denominated in foreign currencies are updated at year-end spot exchange rates.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Gains or losses of monetary and non-monetary items are recognised in the income statement.

Balance sheet items are translated at period-end exchange rates. Exchange differences on translation of the net assets of such entities whose functional currency are not the Euro are taken to equity and recorded in a separate currency translation reserve.

(f) Care and Maintenance Expenditure

Care and maintenance expenditure includes costs incurred to maintain assets and infrastructure in an operationally ready state during periods of reduced or suspended activity. These costs may relate to preparatory works for potential projects, ongoing maintenance of assets not currently in active production, or regulatory compliance obligations.

Under IFRS, these expenditures are classified below gross profit in the statement of comprehensive income because they are not directly attributable to revenue-generating operations. Instead, they represent period costs incurred while assets are not in active use, and therefore, are recognised as an operating expense rather than part of cost of sales.

2.4 Business combinations

The Group applies the acquisition method to account for business combinations.

The acquisition date is the date on which the Group obtains control of the acquired business.

The consideration transferred in a business combination is determined at the acquisition date as the aggregate of the fair values of the assets transferred, the liabilities incurred or assumed, the equity instruments issued and any contingent consideration dependent on future events or the fulfilment of certain conditions in exchange for control of the acquired business.

The consideration transferred excludes any payment that does not form part of the exchange for the acquired business. Acquisition related costs are recognised as an expense as incurred.

At the acquisition date, the Group recognises the assets acquired and liabilities assumed at their fair value. The non controlling interest in the acquired business is recognised at the amount corresponding to its proportionate share of the fair value of the net assets acquired. This criterion is only applicable to non controlling interests that provide a present ownership interest entitling their holders to a proportionate share of the entity's net assets in the event of liquidation. Otherwise, non controlling interests are measured at fair value or at the value based on market conditions. The liabilities assumed include contingent liabilities to the extent that they represent present obligations arising from past events and their fair value can be measured reliably. In addition, the Group recognises indemnification assets granted by the seller at the same time and using the same measurement criteria as the indemnified item of the acquired business, taking into account, where applicable, the risk of insolvency and any contractual limitations on the indemnified amount.

This criterion does not apply to non current assets or disposal groups classified as held for sale, defined benefit long term employee benefit liabilities, share based payment transactions, deferred tax assets and liabilities, and intangible assets arising from the reacquisition of previously granted rights.

The assets and liabilities assumed are classified and designated for subsequent measurement on the basis of the contractual arrangements, economic conditions, accounting policies and operating policies and other conditions existing at the acquisition date, except for lease contracts in which the acquired business is the lessor and insurance contracts.

Any excess of the consideration transferred, plus the amount recognised for non controlling interests, over the net amount of the assets acquired and liabilities assumed is recognised as goodwill. Where applicable, any shortfall, after reassessing the amount of the consideration transferred, the amount recognised for non controlling interests and the identification and measurement of the net assets acquired, is recognised in a separate line item in the consolidated income statement.

Contingent consideration is classified in accordance with the underlying contractual terms as a financial asset or liability, an equity instrument or a provision. To the extent that subsequent changes in the fair value of a financial asset or liability do not correspond to a measurement period adjustment, they are recognised in profit or loss. Contingent consideration classified as equity is not subsequently remeasured, and its settlement is recognised in equity. Contingent consideration classified as a provision is subsequently recognised at fair value with changes recognised in profit or loss.

2.5 Non-controlling interests

Non controlling interests in subsidiaries are recognised at the acquisition date at their proportionate share of the fair value of the identifiable net assets.

Non controlling interests are presented in consolidated equity separately from the equity attributable to the shareholders of the Parent. Non controlling interests in the consolidated results for the year are likewise presented separately in the consolidated income statement.

The Group's interest and the non controlling interests in the consolidated results for the year and in the changes in equity of subsidiaries, after taking into account consolidation adjustments and eliminations, are determined on the basis of ownership interests at the reporting date, without considering the possible exercise or conversion of potential voting rights and after deducting the effect of dividends, whether agreed or not, on cumulative preference shares classified in equity. However, the Group's interest and the non controlling interests are determined taking into account the possible exercise of potential voting rights and other derivative financial instruments that, in substance, currently provide access to the returns associated with ownership interests in subsidiaries.

Profit or loss and each component of other comprehensive income are attributed to the equity attributable to the shareholders of the Parent and to non controlling interests in proportion to their ownership interests, even if this results in a deficit balance in non controlling interests. Agreements entered into between the Group and non controlling interests are recognised as a separate transaction.

The Group recognises put options over interests in subsidiaries granted to non controlling interests at the acquisition date of a business combination as an anticipated acquisition of those interests, recognising a financial liability at the present value of the best estimate of the amount payable, which forms part of the consideration transferred. Put options over interests in subsidiaries granted to non controlling interests subsequent to the business combination are recognised as a financial liability at the present value of the best estimate of the amount payable, with a corresponding entry in reserves.

In subsequent periods, changes in the financial liability are recognised as a finance expense or finance income in profit or loss. Any discretionary dividends paid to non controlling interests up to the exercise date of the options are recognised as a distribution of profits. If the options are ultimately not exercised, the transaction is recognised as a sale of interests to non controlling shareholders.

2.6 Associates and joint ventures

An associate is an entity over which the Parent, directly or indirectly through subsidiaries, exercises significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee (generally accompanied by an ownership interest of between 20% and 50% of the voting rights), without constituting control or joint control. In assessing whether significant influence exists, potential voting rights that are exercisable or convertible at the reporting date of each year are considered, including potential voting rights held by the Group or by another entity.

Joint arrangements are those in which there is a contractual agreement to share control over an economic activity, such that decisions about the relevant activities require the unanimous consent of the Group and the other parties or operators. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

Investments in associates and joint ventures are accounted for using the equity method from the date on which significant influence or joint control is obtained, respectively, until the date on which the Parent can no longer justify their existence.

Investments in associates and joint ventures are initially recognised at cost, including any directly attributable acquisition costs and any contingent consideration asset or liability dependent on future events or the fulfilment of certain conditions.

Any excess of the cost of the investment over the Group's share of the fair values of the identifiable net assets is recognised as goodwill, which is included in the carrying amount of the investment. Any shortfall, after reassessing the cost of the investment and the identification and measurement of the net assets of the associate or joint venture, is recognised as income in determining the investor's share of the profit or loss of the associate or joint venture in the year of acquisition.

The accounting policies of associates and joint ventures have been aligned in terms of reporting date and measurement on the same basis as that applied to subsidiaries.

The Group's share of the profits or losses of associates and joint ventures arising from the acquisition date is recognised as an increase or decrease in the carrying amount of the investments, with a corresponding entry in the line item Share of profit or loss of associates accounted for using the equity method in the consolidated income statement. Similarly, the Group's share of other comprehensive income of associates and joint ventures arising from the acquisition date is recognised as an increase or decrease in the carrying amount of the investments, with the corresponding entry recognised by nature in other comprehensive income. Dividend distributions are recognised as a reduction in the carrying amount of the investments. In determining the Group's share of profits or losses, including impairment losses recognised by associates or joint ventures, income and expenses arising from the acquisition method are taken into account.

The Group's share of the profits or losses of associates and joint ventures and of changes in equity is determined on the basis of ownership interests at the reporting date, without considering the possible exercise or conversion of potential voting rights. However, the Group's share is determined taking into account the possible exercise of potential voting rights and other derivative financial instruments that, in substance, currently provide access to the returns associated with ownership interests in associates or joint ventures.

Losses of associates and joint ventures attributable to the Group are limited to the amount of the net investment, except where the Group has incurred legal or constructive obligations or has made payments on behalf of the associates or joint ventures. For the purposes of recognising impairment losses in associates and joint ventures, the net investment is determined as the carrying amount resulting from the application of the equity method together with any other item that, in substance, forms part of the investment in the associates or joint ventures. Any excess of losses over the investment in equity instruments is allocated to the remaining components in reverse order of their priority in liquidation. Profits subsequently generated by those associates or joint ventures for which recognition of losses had been limited to the amount of the investment are recognised to the extent that they exceed previously unrecognised losses. The Group applies the measurement criteria for financial instruments to the other components that form part of the net investment and to which the equity method is not applied, prior to recognising the losses referred to above. In applying those criteria, the Group does not take into account the recognition of losses arising from the equity method in the carrying amount of those items. As a result, the measurement of those items at fair value and, where applicable, impairment, affects the recognition of losses arising from the equity method in prior periods and in the current year.

Unrealised gains and losses arising from transactions between the Group and associates or joint ventures are recognised only to the extent of the interests of other unrelated investors. This criterion does not apply to the recognition of unrealised losses that provide evidence of impairment of the asset transferred. However, gains and losses arising from transactions between the Group and associates or joint ventures involving net assets that constitute a business are recognised in full.

Unrealised gains and losses on non monetary contributions of assets that do not constitute a business by the Group to associates or joint ventures are recognised in accordance with the substance of the transaction. In this respect, where the assets transferred are retained in the associate or joint venture and the transaction has commercial substance, only the proportionate share of gains or losses attributable to the other parties is recognised. Otherwise, no gain or loss is recognised on the transaction. Deferred gains or losses are recognised against the carrying amount of the investment. Unrealised losses are not eliminated to the extent that they provide evidence of impairment of the asset transferred. Where, in addition to the interest received, the Group receives monetary or non monetary assets, the result of the transaction relating to the latter is recognised.

In non monetary contributions of businesses by the Group to associates, gains and losses are recognised in full.

On the reduction of an interest in an associate or joint venture resulting in the loss of significant influence or joint control, respectively, the Group recognises a gain or loss equal to the difference between the consideration received, plus the fair value of any retained investment, and the carrying amount of the interest. The other comprehensive income relating to the associate or joint venture is reclassified in full to profit or loss or reserves as if the associate or joint venture had directly disposed of the related assets or liabilities.

On the reduction of an interest in an associate that does not result in the loss of significant influence, or where the Group loses joint control of a joint venture but retains significant influence, the Group recognises a gain or loss equal to the difference between the consideration received and the proportionate share of the carrying amount of the interest disposed of. The other comprehensive income relating to the proportionate share of the associate disposed of is reclassified to profit or loss or reserves as if the associate had directly disposed of the related assets or liabilities. If the transaction results in a loss, the Group assesses the retained investment for impairment.

On the additional acquisition of interests in an associate, including obtaining joint control, the Group applies the criteria established for the initial acquisition of investments in associates at the date significant influence is obtained, to the proportionate share of the investment acquired.

After application of the equity method, the Group assesses whether there is objective evidence of impairment of the net investment in the associate or joint venture.

Impairment is determined by comparing the carrying amount of the net investment in the associate or joint venture with its recoverable amount, being the higher of value in use and fair value less costs of disposal. In this regard, value in use is determined by reference to the Group's share of the present value of the estimated cash flows from ordinary activities and the amounts that may arise from the ultimate disposal of the associate or joint venture.

The recoverable amount of the investment in an associate or joint venture is assessed for each associate or joint venture individually, unless it does not constitute a cash generating unit.

Impairment losses are not allocated to goodwill or to other assets implicit in the investment in associates or joint ventures arising from the application of the acquisition method. In subsequent periods, reversals of impairment of investments are recognised in profit or loss to the extent that there is an increase in the recoverable amount. Impairment losses are presented separately from the Group's share of the results of associates and joint ventures.

2.7 Joint ventures

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement.

In joint operations, the Group recognises in the consolidated financial statements its assets, including its share of jointly controlled assets; its liabilities, including its share of liabilities incurred jointly with the other operators; the revenue from the sale of its share of the output arising from the joint operation; its share of the revenue from the sale of the output arising from the joint operation; and its expenses, including its share of any jointly incurred expenses.

The acquisition by the Group of an initial and subsequent interest in a joint operation that constitutes a business is recognised by applying the criteria developed for business combinations to the extent of the percentage interest held in the individual assets and liabilities. However, on the subsequent acquisition of an additional interest in a joint operation, the previously held interest in the individual assets and liabilities is not remeasured, provided that the Group retains joint control.

In transactions involving the sale or contribution of assets by the Group to joint operations, gains or losses are recognised only to the extent of the interests of the other operators, unless the losses provide evidence of a loss or impairment of the assets transferred, in which case they are recognised in full.

In transactions involving purchases by the Group from joint operations, gains or losses are recognised only when the acquired assets are sold to third parties, unless the losses provide evidence of a loss or impairment of the assets acquired, in which case the Group recognises in full its proportionate share of the losses.

2.8 Foreign currency transactions and balances

The consolidated financial statements are presented in thousands of euros, rounded to the nearest thousand, which is the functional and presentation currency of the Parent.

Foreign currency transactions are translated into the functional currency using the spot exchange rates between the functional currency and the foreign currency at the dates of the transactions. The spot exchange rate is the rate used in transactions with immediate delivery.

Monetary assets and liabilities denominated in foreign currency are translated into euros at the closing rate at the reporting date, whereas non monetary items measured at historical cost are translated using the exchange rates at the date of the transaction. For these purposes, advances to suppliers and from customers are treated as non monetary items and are therefore translated at the exchange rate prevailing on the date of payment or receipt. The subsequent recognition of inventories received or revenue from sales, in respect of the advance, is measured at the original exchange rate and not at the rate prevailing at the transaction date. Finally, non monetary assets measured at fair value are translated into euros using the exchange rate at the date on which the fair value was determined.

In presenting the consolidated statement of cash flows, cash flows arising from foreign currency transactions are translated into euros using the exchange rates at the dates on which the cash flows occurred. The effect of exchange rate changes on cash and cash equivalents denominated in foreign currency is presented separately in the statement of cash flows as "Effect of exchange rate differences on cash".

Exchange differences arising on the settlement of foreign currency transactions and on the translation into euros of monetary assets and liabilities denominated in foreign currency are recognised in profit or loss. However, exchange differences arising on monetary items that form part of the net investment in foreign operations are recognised as translation differences in other comprehensive income.

Exchange gains or losses relating to monetary financial assets or liabilities denominated in foreign currency are also recognised in profit or loss.

Monetary financial assets denominated in foreign currency classified at fair value through other comprehensive income are considered to be measured at amortised cost in the foreign currency and, accordingly, exchange differences arising from changes in amortised cost are recognised in profit or loss, with the remaining change in fair value recognised in accordance with section 2.13 (financial instruments).

The Group presents the effect of translating deferred tax assets and liabilities denominated in foreign currency together with deferred income tax in profit or loss.

Exchange gains or losses on non monetary financial assets and liabilities and on monetary financial assets and liabilities measured at fair value through profit or loss are recognised together with the change in fair value in other comprehensive income or in profit or loss. The remaining change in fair value is recognised in accordance with section 2.13 (financial instruments). However, the exchange component of equity instruments denominated in foreign currency and measured at fair value through other comprehensive income that are designated as hedged items in fair value hedges of that component is recognised in other comprehensive income.

The translation into euros of foreign operations whose functional currency is not that of a hyperinflationary economy is performed using the following criteria:

- Assets and liabilities, including goodwill and adjustments to net assets arising on acquisition of the operations, including comparative balances, are translated at the closing rate at the date of each balance sheet.

- Income and expenses, including comparative balances, are translated at the exchange rates prevailing on the date of each transaction.

- The resulting exchange differences arising from the application of the above criteria are recognised as translation differences in other comprehensive income.

The same criteria apply to the translation of the financial statements of entities accounted for using the equity method, with the translation differences corresponding to the Group's interest recognised in other comprehensive income.

In presenting the consolidated statement of cash flows, the cash flows, including comparative balances, of foreign subsidiaries and joint ventures are translated into euros using the exchange rates prevailing at the dates on which the cash flows occurred.

Translation differences recognised in other comprehensive income are reclassified to profit or loss, as an adjustment to the gain or loss on disposal, in accordance with the criteria set out in the sections on subsidiaries and associates.

2.9 Property, plant and equipment

Property, plant and equipment is recognised at historical cost less accumulated depreciation and, where applicable, accumulated impairment losses.

When property, plant and equipment is acquired through a non-monetary exchange, the asset is measured at fair value unless the exchange transaction lacks commercial substance or the fair value of neither the asset received nor the asset given up can be measured reliably.

An exchange transaction is considered to have commercial substance when the configuration of the cash flows of the asset received differs from that of the asset transferred, or when the entity-specific value of the portion of the Group's operations affected by the transaction changes as a result of the exchange, and such difference is significant relative to the fair value of the assets exchanged.

If the exchange lacks commercial substance or fair value cannot be measured reliably, the asset received is measured at the carrying amount of the asset given up, adjusted for any monetary consideration transferred, and subject to a ceiling equal to the fair value of the asset received, where available.

The cost of property, plant and equipment constructed by the Group is determined using the same principles as for acquired assets, and additionally incorporates the criteria applied in determining the cost of inventories. Revenue from the sale of items produced during the commissioning period of property, plant and equipment and the related costs are recognised in the consolidated income statement.

The cost of property, plant and equipment includes an estimate of dismantling and removal costs and site restoration costs, where these constitute obligations incurred as a consequence of their use and for purposes other than the production of inventories.

Spare parts intended to be installed in facilities, equipment and machinery as replacements for similar items are measured in accordance with the principles described above. Spare parts with a storage cycle of less than one year are recorded as inventories. Spare parts with a storage cycle exceeding one year and which relate exclusively to specific assets are recognised and depreciated together with those assets. In other cases, they are recognised as "Other property, plant and equipment" and depreciated, where identifiable, in line with the depreciation pattern of the asset being replaced. In general, such spare parts are depreciated from the date they are incorporated into the asset, taking into account the weighted technological or economic useful life of the assets to which they may be attached and their own technical obsolescence.

Subsequent costs are included in the carrying amount of the asset or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of replaced components is derecognised. Where the cost of replaced elements has not been depreciated separately and it is impracticable to determine their carrying amount, the replacement cost is used as an indication of the cost of those elements at the time of acquisition or construction. All other repairs and maintenance are charged to the consolidated income statement in the period in which they are incurred.

Depreciation of property, plant and equipment is calculated by allocating the depreciable amount of the asset systematically over its estimated useful life or the remaining life of mine ("LOM"), field or lease. The depreciable amount represents the acquisition cost less residual value. The Group determines depreciation expense separately for each component, whether physical or non-physical, including costs related to major overhauls of property, plant and equipment that are significant in relation to the total cost of the asset and have a useful life different from the remainder of the asset. Depreciation commences when the asset is available for use.

The principal categories of property, plant and equipment are depreciated either on a units of production ("UOP") basis or on a straight-line basis over their useful lives as follows:

The Group reviews the residual value, useful life and depreciation method of property, plant and equipment at each reporting date. Changes to the originally established criteria are recognised as changes in accounting estimates.

In particular, the Group considers the impact of health, safety and environmental legislation in assessing expected useful lives and estimated residual values. The Group also considers climate-related matters, including physical and transition risks. Specifically, the Group assesses whether climate-related legislation and regulation could affect useful lives or residual values, for example by prohibiting or restricting the use of fossil fuel-powered machinery or imposing additional energy efficiency requirements on buildings and offices.

The Group assesses impairment losses and reversals of impairment losses of property, plant and equipment in accordance with the criteria set out in Note 2.12 Impairment of non-financial assets.

Property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The disposal date is the date on which the buyer obtains control of the asset in accordance with the accounting policy for Revenue from contracts with customers. The consideration received and any subsequent changes thereto are determined in accordance with that revenue policy. Gains and losses on disposal are recognised within "Other income" in the consolidated income statement.

a) Mining rights

Ore Reserves and Mineral Resources that can be reliably measured are recognised at fair value at the acquisition date of the business in accordance with Note 2.4 Business combinations. Mining rights whose fair value cannot be measured reliably are not recognised.

Exploitable mining rights are depreciated using the UOP method over commercially recoverable Ore Reserves and, in certain circumstances, over additional Mineral Resources. Mineral Resources are included in depreciation calculations when there is a high degree of confidence that they will be economically extracted.

b) Deferred mining costs: stripping costs

These primarily comprise certain capitalised costs relating to stripping activities in both the pre-production and production phases, as described below.

Stripping costs incurred during the development phase of a mine (or pit) prior to the commencement of production are capitalised as part of the cost of constructing the mine (or pit) and subsequently depreciated over the life of mine on a UOP basis.

Production stripping costs that relate to improving access to an identifiable component of the ore body, and that provide future economic benefits through improved access to ore to be mined in future periods (stripping activity asset), are capitalised within deferred mining costs provided that all of the following conditions are met:

i. it is probable that the future economic benefit associated with the stripping activity will be realised;

ii. the component of the ore body for which access has been improved can be identified; and

iii. the costs relating to the stripping activity associated with improved access can be measured reliably.

If all criteria are not met, production stripping costs are expensed as incurred.

The stripping activity asset is initially measured at cost, being the accumulation of costs directly incurred to perform the stripping activity that improves access to the identified ore component, together with an allocation of directly attributable overheads in accordance with the principles used to determine the cost of inventories.

c) Exploration expenditure

In accordance with the Group's accounting policy, exploration expenditure is not capitalised until management determines that the project has entered the development phase and that construction of the related mining or infrastructure asset will commence. This does not refer to real estate property, but to the development of a mining asset or associated infrastructure in accordance with IAS 16 and IFRS 6. Capitalisation only occurs once a high degree of confidence exists in the technical and economic viability of the project and it is considered probable that future economic benefits will flow to the Group.

The development decision is taken based on the economic prospects of the project, including future metal prices, Ore Reserves and Mineral Resources, and estimated operating and capital costs.

Subsequent recovery of the resulting carrying amount depends on the successful development or sale of the undeveloped project. If a project is determined to be non-viable, all irrecoverable costs associated with the project, net of any related impairment provisions, are recognised in the consolidated income statement.

d) Assets under construction

All subsequent expenditure incurred in the construction, installation or completion of infrastructure facilities, including processing plants and other works necessary for mining operations, is capitalised under "Assets under construction". Costs incurred in testing assets to determine whether they are functioning as intended are capitalised.

In accordance with IAS 16, revenue from the sale of any products produced during the testing phase is recognised as revenue in the consolidated income statement, and the related production costs are recognised in accordance with IAS 2 Inventories. Such revenue is not offset against the cost of assets under construction.

Development expenditure, including investment in intangible assets, is capitalised when the following criteria are met:

The costs are directly attributable to the preparation of the asset; and

The technical and commercial feasibility of the project has been demonstrated, and it is probable that the expenditure will generate future economic benefits, based on an economic evaluation of the project that considers market conditions, resource estimates, expected operating and capital costs and management's strategic intent.

Costs incurred before technical and commercial feasibility has been demonstrated, or those relating to general research activities, are expensed as incurred.

Assets under construction are transferred to the appropriate asset categories when they are substantially completed and ready for their intended productive use. Depreciation commences at that date.

e) Borrowing costs

The Group capitalises borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets as part of the cost of those assets. Qualifying assets are those that necessarily take a substantial period of time to get ready for their intended use or sale.

To the extent that funds are borrowed specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation is determined based on the actual borrowing costs incurred during the period, less any investment income earned on the temporary investment of those funds. Borrowings obtained specifically for a qualifying asset are treated as general borrowings once substantially all the activities necessary to prepare the asset for its intended use or sale have been completed.

The amount of borrowing costs capitalised in respect of general borrowings is determined by applying a weighted average capitalisation rate to the expenditure on qualifying assets, without exceeding the total borrowing costs incurred during the period.

Capitalisation of borrowing costs commences when expenditure for the asset is incurred, borrowing costs are incurred and activities necessary to prepare the asset (or part thereof) for its intended use or sale are in progress. Capitalisation ceases when substantially all the activities necessary to prepare the asset (or part thereof) for its intended use or sale have been completed.

Capitalisation of borrowing costs is suspended during extended periods in which development activities are interrupted, unless such temporary delay is necessary to bring the asset into a condition suitable for its intended use or sale.

2.10 Leases

The Group has lease contracts for various items of laboratory equipment, motor vehicles, land and buildings used in its operations. Leases of laboratory equipment and motor vehicles generally have lease terms of four years, while land and buildings generally have lease terms over the life of the mine. The Group's obligations under its lease contracts are secured by the lessor's title to the leased assets. In general, the Group is restricted from assigning and subleasing the leased assets.

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. That is, whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Group applies a single recognition and measurement approach for all leases, except for short term leases and leases of low value assets.

At the commencement date, the Group recognises a right of use asset and a lease liability. The right of use asset comprises the amount of the lease liability, any lease payments made at or before the commencement date less any lease incentives received, any initial direct costs incurred and an estimate of dismantling or restoration costs to be incurred, as set out in the accounting policy on provisions.

The Group measures the lease liability at the present value of the lease payments that are unpaid at the commencement date. The lease payments are discounted using the appropriate incremental borrowing rate, unless the interest rate implicit in the lease can be reliably determined.

Outstanding lease payments comprise fixed payments, less any incentives receivable, variable payments that depend on an index or rate, initially measured using the index or rate at the commencement date, amounts expected to be payable under residual value guarantees, the exercise price of a purchase option if exercise is reasonably certain and payments of penalties for terminating the lease, if the lease term reflects the exercise of the termination option.

The Group measures right of use assets at cost, less accumulated depreciation and accumulated impairment losses, adjusted for any remeasurement of the lease liability.

- If the contract transfers ownership of the asset to the Group at the end of the lease term or the right of use asset includes the exercise price of a purchase option, depreciation is charged in accordance with the criteria set out for property, plant and equipment from the commencement date to the end of the useful life of the asset. Otherwise, the Group depreciates the right of use asset from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term.

- The Group applies the impairment criteria for non current assets set out in section 2.12 to right of use assets.

- The lease liability is increased by the finance cost accrued, reduced by lease payments made and remeasured to reflect any lease modifications or revisions to in substance fixed payments.

- Variable lease payments not included in the initial measurement of the lease liability are recognised in profit or loss in the period in which the events or conditions that trigger those payments occur.

- Remeasurements of the lease liability are recognised as an adjustment to the right of use asset, until it is reduced to zero and thereafter in profit or loss.

- The Group remeasures the lease liability by discounting the revised lease payments using a revised discount rate if there is a change in the lease term or a change in the assessment of whether a purchase option will be exercised.

- The Group remeasures the lease liability if there is a change in the amounts expected to be payable under a residual value guarantee or a change in the index or rate used to determine lease payments, including a change to reflect revisions to market rents once such revisions take effect.

The Group accounts for the full or partial derecognition of a lease liability in accordance with the criteria applicable to the derecognition of financial liabilities.

A reassessment after the commencement date is made only if one of the following conditions applies:

a) There is a change in the contractual terms, other than a renewal or extension of the agreement.

b) A renewal option is exercised, or an extension is granted, unless the term of the renewal or extension was initially included in the lease term.

c) There is a change in the assessment of whether fulfilment depends on a specified asset.

d) There is a substantial change in the asset.

The Group accounts for a lease modification as a separate lease if the scope of the lease increases by adding one or more rights of use and the consideration for the lease increases by an amount commensurate with the stand alone price for the increase in scope and any appropriate adjustments to that stand alone price to reflect the particular circumstances of the contract.

If the modification does not result in a separate lease, at the effective date of the modification the Group allocates the consideration to the modified contract as described above, redetermines the lease term and remeasures the lease liability by discounting the revised lease payments using a revised discount rate. The Group decreases the carrying amount of the right of use asset to reflect the partial or full termination of the lease in modifications that decrease the scope of the lease and recognises any gain or loss in profit or loss. For all other modifications, the Group makes a corresponding adjustment to the carrying amount of the right of use asset.

Short term leases and leases of low value assets

The Group applies the short term lease recognition exemption to its short term leases of machinery and equipment, that is, leases with a lease term of 12 months or less from the commencement date and that do not contain a purchase option. It also applies the low value asset recognition exemption to leases of office equipment that are considered to be of low value, that is, below €5,000. Lease payments on short term leases and leases of low value assets are recognised as an expense on a straight line basis over the lease term.

2.11 Intangible assets

a) Permits

Permits represent legal rights, licences and authorisations required to advance mining projects from the pre-development stage to production. Costs directly attributable to obtaining these permits are capitalised as intangible assets, provided that they meet the recognition criteria set out in IAS 38 - Intangible Assets. These costs generally include application fees, environmental and engineering studies, legal fees and other necessary expenditure incurred to obtain the permits.

No amortisation is recognised in respect of these intangible assets until the associated project enters the commercial production phase. Once the required permits have been obtained and production commences, the capitalised permit costs are amortised using the units of production ("UOP") method, based on the commercially recoverable Ore Reserves of the related mining project.

If at any time it is determined that a permit will not be utilised due to project suspension or regulatory changes, the capitalised costs are immediately impaired and recognised as an expense in the consolidated income statement. The Group periodically assesses the status of each project. If a subsequent evaluation determines that the circumstances that gave rise to the impairment have ceased to exist or have been reasonably mitigated, the Group reverses the previously recognised impairment loss.

b) Other intangible assets, including computer software

Intangible assets are presented in the consolidated statement of financial position at cost less accumulated amortisation and accumulated impairment losses. The cost of intangible assets acquired in a business combination is their fair value at the acquisition date, provided that they meet the recognition criteria set out in IFRS 3.

The Group assesses, for each acquired intangible asset, whether its useful life is finite or indefinite. An intangible asset is considered to have an indefinite useful life when there is no foreseeable limit to the period over which it is expected to generate net cash inflows.

Amortisation of intangible assets with finite useful lives is calculated by allocating the depreciable amount systematically over their estimated useful lives as follows:

For this purpose, the depreciable amount represents the acquisition cost or deemed cost less residual value.

Intangible assets with indefinite useful lives are not amortised but are tested annually for impairment, or more frequently if indicators of impairment exist.

The Group reviews the residual value, useful life and amortisation method of intangible assets at each reporting date. Changes to the originally established estimates are accounted for as changes in accounting estimates.

The Group assesses and recognises impairment losses and reversals of impairment losses on intangible assets in accordance with the criteria set out in Note 2.12.

An intangible asset is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The disposal date is the date on which the buyer obtains control of the asset in accordance with the accounting policy for Revenue from contracts with customers. The consideration received on disposal and any subsequent adjustments thereto are determined in accordance with that policy.

c) Contingent liabilities in the acquisition of intangible assets

The Group has adopted the approach set out in IFRIC 1 for contingent payments related to the acquisition of assets. When acquiring intangible assets subject to contingent payments dependent on future events, such as in the case of the Touro, Masa Valverde and Ossa Morena projects (see Note 1), the Group assesses whether such payments are directly attributable to the cost of the acquired asset.

If the analysis concludes that the payment is linked to the acquisition cost, the Group recognises an intangible asset reflecting the fair value of the rights acquired and a corresponding liability based on the best estimate of the expected future payment, including any anticipated undetermined costs.

If the contingent payment is not directly related to the acquisition cost of the asset, it is recognised as an expense in the period in which it is incurred.

Subsequent changes in the estimated liability resulting from revisions to assumptions, project viability or economic factors are recognised as an adjustment to the carrying amount of the intangible asset. If, at a later stage, uncertainty arises regarding continuation of the project leading to a reassessment of the probability of making the contingent payment, the Group adjusts the liability accordingly and recognises the change against the carrying amount of the asset.

Where intangible assets include non-controlling interests, the Group allocates the corresponding portion of the asset to non-controlling shareholders, ensuring that valuation adjustments to contingent liabilities are appropriately reflected. This policy is applied consistently across all projects to ensure compliance with IFRS and alignment with industry practice.

2.12 Impairment of non financial assets

Assets that have an indefinite useful life (for example, goodwill or intangible assets not yet available for use) are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised in profit or loss when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use.

Value in use is determined based on the expected future cash flows to be derived from the use of the asset, expectations about possible variations in the amount or timing of those cash flows, the time value of money, the price for bearing the uncertainty inherent in the asset and other factors that market participants would consider in assessing the future cash flows related to the asset. The Group assesses whether climate related risks, including physical risks and transition risks, could have a significant impact on the value in use of assets.

The recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

When testing a CGU for impairment, the Group identifies the common assets related to it. If a portion of the common assets can be allocated to the CGU on a reasonable and consistent basis, the Group compares the carrying amount of the CGU, including the allocated common assets, with its recoverable amount and recognises any impairment loss at the CGU level. If the Group cannot allocate a portion of the common assets to the CGU on a reasonable and consistent basis, it compares the carrying amount of the CGU, excluding the common assets, with its recoverable amount and recognises any impairment loss at the CGU level. The Group then identifies the smallest group of CGUs to which the carrying amount of the common assets can be allocated on a reasonable and consistent basis and compares the carrying amount of that group of CGUs, including the common assets, with its recoverable amount and recognises any impairment loss at the level of that group of CGUs.

Impairment losses relating to a CGU are allocated first to reduce, where applicable, the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro rata basis according to the carrying amount of each asset, subject to the limit that the carrying amount of each asset is not reduced below the highest of its fair value less costs of disposal, its value in use and zero.

At each reporting date, the Group assesses whether there is any indication that an impairment loss recognised in prior periods may no longer exist or may have decreased. Impairment losses relating to goodwill are not reversible. Impairment losses for other assets are reversed only if there has been a change in the estimates used to determine the asset's recoverable amount.

A reversal of an impairment loss is recognised in profit or loss. However, the increased carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined, net of amortisation, had no impairment loss been recognised.

The reversal of an impairment loss for a CGU is allocated to the assets of the CGU, except for goodwill, on a pro rata basis according to the carrying amount of those assets, subject to the limit that the carrying amount of each asset does not exceed the lower of its recoverable amount and the carrying amount that would have been determined, net of amortisation, had no impairment loss been recognised.

2.13 Financial instruments

a) Recognition and classification of financial instruments

Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument, in accordance with the substance of the contractual arrangement and the definitions of a financial asset, financial liability or equity instrument set out in IAS 32 Financial Instruments: Presentation.

Financial instruments are recognised when the Group becomes a party to the contractual provisions of the instrument.

For measurement purposes, the Group classifies financial instruments into the following categories:

- financial assets and liabilities at fair value through profit or loss, distinguishing those designated on initial recognition from those held for trading or mandatorily measured at fair value through profit or loss;

- financial assets and liabilities measured at amortised cost; and

- financial assets measured at fair value through other comprehensive income, distinguishing equity instruments designated as such from other financial assets.

The Group classifies financial assets, other than those designated at fair value through profit or loss and equity instruments designated at fair value through other comprehensive income, based on the business model and the characteristics of the contractual cash flows. Financial liabilities are classified as measured at amortised cost, except for those designated at fair value through profit or loss and those held for trading.

A financial asset or liability is classified as held for trading if:

• it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;

• on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit taking;

• it is a derivative, except for a derivative designated as a hedging instrument that meets the conditions for hedge effectiveness and a derivative that is a financial guarantee contract; or

• it is an obligation to deliver financial assets borrowed that are not owned.

A financial asset is classified at amortised cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding (SPPI).

Contractual cash flows that are SPPI are consistent with a basic lending arrangement. In a basic lending arrangement, interest typically consists of consideration for the time value of money and credit risk. However, in such an arrangement, interest may also include consideration for other risks, such as liquidity risk, and costs, such as administrative costs associated with holding the financial asset for a particular period. In addition, interest may include a profit margin consistent with a basic lending arrangement.

A financial asset is classified at fair value through other comprehensive income if it is held within a business model whose objective is achieved both by collecting contractual cash flows and by selling financial assets and the contractual terms of the financial asset give rise, on specified dates, to cash flows that are SPPI.

The Group has designated its investments in listed equity instruments as financial assets measured at fair value through other comprehensive income.

All other financial assets are classified at fair value through profit or loss.

Financial assets and liabilities arising from contingent consideration in a business combination are classified as financial assets and liabilities at fair value through profit or loss.

Other financial liabilities, except for financial guarantee contracts, loan commitments at below market interest rates and financial liabilities arising from a transfer of financial assets that does not qualify for derecognition or that is accounted for using the continuing involvement approach, are classified as financial liabilities at amortised cost.

A financial asset and a financial liability are offset only when the Group has a currently enforceable legal right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The legal right must not be contingent on a future event and must be legally enforceable in the normal course of business, in the event of insolvency or in the event of judicially declared liquidation and in the event of default.

The Group reclassifies financial assets when it changes its business model for managing those assets. Financial liabilities are not reclassified.

b) Financial assets and liabilities at amortised cost

Financial assets and liabilities at amortised cost are initially recognised at fair value, plus or minus transaction costs incurred, and are subsequently measured at amortised cost using the effective interest method.

c) Financial assets and liabilities at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income are initially recognised at fair value plus directly attributable transaction costs.

Subsequent to initial recognition, financial assets in this category are measured at fair value, with gains or losses recognised in other comprehensive income, except for foreign exchange gains and losses as described in section 2.8 and expected credit losses. Amounts recognised in other comprehensive income are reclassified to profit or loss on derecognition of the financial assets. However, interest calculated using the effective interest method is recognised in profit or loss.

As indicated above, the Group has designated certain equity instruments as measured at fair value through other comprehensive income. Subsequent to initial recognition, these equity instruments are measured at fair value, with gains or losses recognised in other comprehensive income. Amounts recognised in other comprehensive income are not reclassified to profit or loss, although they may be transferred to reserves on derecognition of the instruments. Dividends are recognised as set out in section h) of this note.

d) Financial assets and liabilities at fair value through profit or loss

Financial assets and liabilities at fair value through profit or loss are initially recognised at fair value. Directly attributable transaction costs are recognised in profit or loss as incurred.

Subsequent to initial recognition, they are measured at fair value, with changes recognised in profit or loss. Changes in fair value include the interest and dividend components. Fair value is not reduced by transaction costs that may be incurred on sale or other disposal.

However, for financial liabilities designated at fair value through profit or loss, changes in fair value attributable to the entity's own credit risk are recognised in other comprehensive income. Amounts recognised in other comprehensive income are not subsequently reclassified to the consolidated income statement.

In accordance with IFRS 9, where the Group holds a hybrid contract containing a non-derivative host that is a financial asset within the scope of IFRS 9, the hybrid instrument is assessed in its entirety for classification purposes. Embedded derivatives are not separated from the host contract in such cases.

Where the contractual cash flows of the hybrid instrument do not represent solely payments of principal and interest on the principal amount outstanding, the instrument is classified and measured at fair value through profit or loss.

Convertible instruments held by the Group are assessed under this framework. Where the conversion feature results in cash flows that do not meet the solely payments of principal and interest criterion, the instrument is measured at fair value through profit or loss.

e) Financial assets measured at cost

Investments in equity instruments for which there is insufficient information to measure fair value, or where there is a wide range of possible fair value measurements, and derivatives linked to such investments that must be settled by delivery of those investments, are measured at cost. However, if at any time the Group is able to obtain a reliable measurement of fair value, the asset or contract is measured at fair value, with gains or losses recognised in profit or loss or in other comprehensive income if the instrument is designated at fair value through other comprehensive income.

f) Derecognition and modification of financial assets

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

In transactions in which a financial asset is derecognised in its entirety, any financial assets obtained or financial liabilities incurred, including liabilities relating to servicing arrangements, are recognised at fair value.

Derecognition of a financial asset in its entirety results in the recognition in profit or loss of the difference between its carrying amount and the sum of the consideration received, net of transaction costs, including any assets obtained or liabilities assumed and any cumulative gain or loss previously recognised in other comprehensive income, except for equity instruments designated at fair value through other comprehensive income.

If the Group modifies the contractual cash flows of a financial asset without resulting in derecognition, the carrying amount is recalculated as the present value of the modified cash flows discounted at the original effective interest rate or the original credit adjusted effective interest rate, with any difference recognised in profit or loss. Fees and costs charged by the Group adjust the carrying amount of the financial asset and are amortised over the remaining term of the modified financial asset.

g) Impairment of financial assets

The Group recognises in profit or loss a loss allowance for expected credit losses on financial assets measured at amortised cost and at fair value through other comprehensive income.

For financial assets measured at fair value through other comprehensive income, the expected credit loss is recognised in other comprehensive income and does not reduce the carrying amount of the assets.

Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. Expected cash flows include cash flows from the sale of collateral or other credit enhancements that are integral to the contractual terms.

The Group's trade receivables mainly arise from sales of copper concentrate to large international commodity trading companies. Based on historical experience and the creditworthiness of counterparties, expected credit losses are considered immaterial.

For receivables (other than trade receivables measured at fair value through profit or loss), the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected credit losses to be recognised from initial recognition of the receivables.

At each reporting date, the Group measures the loss allowance at an amount equal to 12 month expected credit losses for financial assets for which credit risk has not increased significantly since initial recognition or where the Group determines that the credit risk of a financial asset has not increased significantly.

The Group considers a financial asset to be in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that it is unlikely that the Group will receive the outstanding contractual amounts in full before taking into account any credit enhancements held.

The Group considers cash and cash equivalents to have low credit risk based on the credit ratings of the financial institutions with which the cash or deposits are held.

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows, which generally occurs when collection is more than one year past due and there is no enforceable collateral.

h) Interest and dividends

Interest income is recognised using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the carrying amount of the instrument, based on its contractual terms and without considering expected credit losses.

Dividend income from investments in equity instruments is recognised in profit or loss when the Group's right to receive payment is established, it is probable that the economic benefits will flow to the Group and the amount can be measured reliably.

Dividends on equity instruments classified at fair value through other comprehensive income are recognised in profit or loss unless they clearly represent a recovery of part of the cost of the investment, in which case they are recognised in other comprehensive income.

i) Derecognition and modification of financial liabilities

The Group derecognises a financial liability, or part of it, when the obligation specified in the liability is discharged or is legally released, either by a judicial process or by the creditor.

An exchange of debt instruments between the Group and a counterparty, or substantial modifications of the terms of an existing financial liability, is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability where the terms are substantially different.

The Group considers the terms to be substantially different if the present value of the cash flows under the new terms, including any fees paid net of any fees received, discounted using the original effective interest rate, differs by at least 10 per cent from the present value of the remaining cash flows of the original financial liability. For this purpose, only fees paid or received between the borrower and the lender are considered, including fees paid or received by either party on behalf of the other.

If the exchange is accounted for as an extinguishment of the original financial liability, any costs or fees are recognised in profit or loss as part of the gain or loss on extinguishment. Otherwise, the modified cash flows are discounted using the original effective interest rate, with any difference from the previous carrying amount recognised in profit or loss. Fees and costs adjust the carrying amount of the financial liability and are amortised using the amortised cost method over the remaining term of the modified liability.

The Group recognises in profit or loss the difference between the carrying amount of a financial liability, or part of it, extinguished or transferred to a third party and the consideration paid, including any non cash assets transferred or liabilities assumed.

2.14 Contracts for the purchase or sale of non financial assets

The Group enters into forward contracts for the purchase or sale of inventories in accordance with its production requirements and others for trading purposes. At inception and on an ongoing basis, the Group assesses whether such contracts should be recognised as derivative financial instruments. For this purpose, the Group maintains separate records of contracts that meet the conditions not to be classified as derivative financial instruments and those that must be considered as held for trading.

The Group treats as own use contracts those contracts for the purchase or sale of a non financial item that were entered into and continue to be held for the purpose of receipt or delivery in accordance with the entity's expected purchase, sale or usage requirements.

Transaction costs relating to contracts classified as own use contracts are recognised in accordance with the general criteria applicable to costs related to purchase and sale transactions.

The Group enters into contracts relating to nature dependent electricity. Contracts relating to nature dependent electricity are contracts that expose the entity to variability in the underlying volume of electricity because the source of its generation depends on uncontrollable natural conditions (for example, weather conditions). Contracts relating to nature dependent electricity include both contracts for the purchase or sale of such electricity and financial instruments based on that electricity.

Certain contracts relating to nature dependent electricity require the Group to purchase and take delivery of electricity as it is generated. Such contractual features expose the Group to the risk of being required to purchase electricity during a supply period in which it cannot use that electricity. In practice, the Group may also be unable to avoid selling unused electricity because the design and operation of the electricity market in which the electricity is traded under the contract require unused electricity to be sold within a specified period.

In applying the above requirements, such sales are not necessarily inconsistent with holding a contract in accordance with the Group's expected usage requirements. The Group is considered to have entered into and to hold such a contract in accordance with its expected electricity usage requirements if it has been, and is expected to be, a net purchaser of electricity over the term of the contract. The Group is a net purchaser of electricity if it purchases sufficient electricity to offset sales of unused electricity in the same market in which those sales occur.

In determining whether it is a net purchaser of electricity, the Group considers reasonable and supportable information that is available without undue cost or effort regarding its past, current and expected electricity transactions over a reasonable period. In determining what constitutes a reasonable period, the Group considers the variability in the volume of electricity expected to be generated due to the seasonal cycle of natural conditions and the variability in its own electricity demand due to its operating cycle. For the purpose of determining whether the Group has been a net purchaser, the reasonable period does not exceed twelve months.

2.15 Inventories

The Group's inventories comprise copper concentrates, ore stockpiles and metal in circuit, materials and supplies and spare parts. Inventory is physically measured or estimated and is stated at the lower of cost and net realisable value.

Cost of purchase includes the amount invoiced by the supplier after deducting any discounts, rebates or similar items, as well as interest incorporated in the nominal amount of payables and any additional costs incurred until the goods are in their location for sale, other costs directly attributable to the acquisition and non recoverable indirect taxes.

Cost of production comprises the purchase cost of raw materials and other consumables and costs directly related to the units produced, together with a systematic allocation of variable and fixed production overheads incurred in the process of conversion, including depreciation. Fixed production overheads are allocated based on normal production capacity or actual production, whichever is higher. Identifiable conversion costs for each metal are specifically allocated.

The cost of raw materials and other supplies and the cost of production are assigned to the individual items of inventory using the FIFO method. The Group uses the same cost formula for all inventories having a similar nature and use within the Group.

The cost of inventories is written down to profit or loss where their cost exceeds their net realisable value. For this purpose, net realisable value is defined as follows:

• Raw materials and other supplies: replacement cost. However, no write down is made where the finished products into which the raw materials and other supplies will be incorporated are expected to be sold at or above their cost of production.

• Finished goods: estimated selling price less the costs necessary to make the sale.

• Work in progress: estimated selling price of the related finished goods less the estimated costs to complete production and the costs necessary to make the sale. Where the time value of money is material, these future prices and completion costs are discounted.

A previously recognised write down is reversed through profit or loss if the circumstances that caused the write down no longer exist or where there is clear evidence of an increase in net realisable value as a result of a change in economic circumstances. The reversal of a write down is limited to the lower of the cost and the revised net realisable value of the inventories.

2.16 Cash and cash equivalents

Cash and cash equivalents include cash on hand and demand deposits with credit institutions. This category also includes other short term highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value. For this purpose, investments with maturities of less than three months from the date of acquisition are included.

2.17 Share capital and dividend distribution

The Parent recognises share capital increases and reductions in equity when the shares have been issued and subscribed.

Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the Parent and the nominal value of the share capital issued is recognised in the share premium account.

Incremental costs directly attributable to the issue of new ordinary shares are recognised in equity as a deduction, net of tax, from the proceeds in the share premium account.

Dividends of a discretionary nature, whether paid in cash or in kind, are recognised as a reduction in equity when they are approved by the General Meeting of Shareholders.

2.18 Provisions

Provisions are recognised when the Group has a present obligation, whether legal or constructive, as a result of a past event; it is probable that an outflow of resources embodying future economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

The amounts recognised in the consolidated statement of financial position represent the best estimate at the reporting date of the expenditure required to settle the present obligation, taking into account the risks and uncertainties surrounding the provision and, where material, the financial effect of discounting, provided that the amounts to be paid in each period can be reliably determined. The discount rate is determined on a pre tax basis, taking into account the time value of money and the specific risks not reflected in the future cash flows relating to the provision at each reporting date.

Individual obligations are measured at the most likely individual outcome. Where the obligation involves a large population of homogeneous items, it is measured by weighting all possible outcomes by their associated probabilities. Where there is a continuous range of possible outcomes and each point in that range is as likely as any other, the obligation is measured at the mid point of the range.

The unwinding of the discount on provisions is recognised as a finance cost in profit or loss.

Provisions do not include tax effects or expected gains from the disposal or abandonment of assets.

Reimbursement rights receivable from third parties to settle the provision are recognised as a separate asset when recovery is virtually certain. The related income from reimbursement is recognised in profit or loss as a reduction of the expense relating to the provision, limited to the amount of the provision.

Provisions are reversed through profit or loss when it is no longer probable that an outflow of resources will be required to settle the obligation. The reversal is recognised in the same line item in which the related expense was originally recorded and any excess is recognised in other income.

Provision for dismantling, restoration and similar obligations

The Group recognises the present value of the estimated costs of legal or constructive obligations to restore operating sites in the period in which the obligation arises. These restoration activities include the dismantling and removal of structures, rehabilitation of mines and tailings dams, decommissioning of operating facilities, closure of plants and waste sites, and the restoration, remediation and revegetation of affected areas.

The obligation generally arises when the asset is installed or the land or environment at the production site is disturbed. When the provision is initially recognised, the present value of the estimated restoration cost is capitalised as part of the cost of the related mining assets to the extent that the obligation has been incurred before production of the related ore commences.

Changes in the provision arising from revisions to the estimated amount, timing of cash flows or discount rate increase or decrease the cost of the asset, limited to its carrying amount, with any excess recognised in profit or loss. The Group assesses whether an increase in the carrying amount of property, plant and equipment is an indication of impairment. For closed sites, changes in estimated costs are recognised immediately in the consolidated income statement. Similarly, the unwinding of the discount on the provision is recognised as a finance cost in profit or loss.

Changes in the amount of the provision arising after the end of the useful life of the asset are recognised in profit or loss as they occur.

The Group reviews its mine rehabilitation provision annually, which involves the use of significant estimates, including estimates of the scope and cost of rehabilitation activities, technological changes, regulatory changes and changes in discount rates. The Group also considers the impact of climate related matters, such as changes in environmental regulations and other relevant laws, when estimating the rehabilitation provision. These factors may result in future required outflows differing from the amounts provided. The amounts recognised in the consolidated statement of financial position represent the best estimate at the reporting date.

2.19 Income tax

Income tax expense or income comprises both current tax and deferred tax.

Current tax is the amount payable or recoverable in respect of the consolidated taxable profit or loss for the year. Current income tax assets or liabilities are measured at the amounts expected to be paid to or recovered from the tax authorities, using tax laws and rates that have been enacted or substantively enacted at the reporting date.

Deferred tax liabilities are the amounts of income tax payable in future periods in respect of taxable temporary differences, while deferred tax assets are the amounts of income tax recoverable in future periods arising from deductible temporary differences, unused tax losses or unused tax credits. A temporary difference is the difference between the carrying amount of an asset or liability and its tax base.

Income tax is recognised in profit or loss unless it arises from a transaction or economic event recognised, in the same or a different period, directly in equity or from a business combination.

The Group recognises deferred tax liabilities in all cases except where:

- they arise from the initial recognition of goodwill or from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit and does not give rise to equal taxable and deductible temporary differences;

- they relate to temporary differences associated with investments in subsidiaries, associates and joint ventures over which the Group is able to control the timing of the reversal and it is probable that the temporary difference will not reverse in the foreseeable future.

The Group recognises deferred tax assets provided that:

- it is probable that sufficient future taxable profits will be available against which they can be utilised or where tax legislation provides for the future conversion of deferred tax assets into a receivable from the tax authorities. However, deferred tax assets arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit and does not give rise to equal taxable and deductible temporary differences are not recognised;

- they relate to temporary differences associated with investments in subsidiaries, associates and joint ventures, to the extent that the temporary differences are expected to reverse in the foreseeable future and sufficient future taxable profits are expected to be available against which the temporary differences can be utilised.

Where, in a transaction that is not a business combination, a deferred tax asset and a deferred tax liability of the same amount arise on initial recognition but the deferred tax asset cannot be recognised because it is not probable that sufficient future taxable profits will be available or different tax rates apply, the difference is recognised in profit or loss.

The Group considers that sufficient taxable profits will be available to recover deferred tax assets where there are sufficient taxable temporary differences relating to the same tax authority and the same taxable entity, the reversal of which is expected in the same tax period as the reversal of the deductible temporary differences or in periods in which a tax loss arising from a deductible temporary difference can be carried back or forward.

In determining future taxable profits, the Group takes into account tax planning opportunities, provided that it intends to adopt them or it is probable that it will adopt them.

Deferred tax assets and liabilities are measured using the tax rates expected to apply in the periods in which the assets are realised or the liabilities are settled, based on tax laws and rates that have been enacted or substantively enacted, and taking into account the tax consequences that would follow from the manner in which the Group expects to recover the assets or settle the liabilities.

At each reporting date, the Group reviews the carrying amount of deferred tax assets and reduces that amount to the extent that it is no longer probable that sufficient future taxable profits will be available to allow the benefit of all or part of those deferred tax assets to be utilised.

Deferred tax assets that do not meet the above conditions are not recognised in the consolidated statement of financial position. At the reporting date, the Group reassesses whether the conditions for recognising previously unrecognised deferred tax assets are met.

Management periodically evaluates the positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation. Where it concludes that it is not probable that the tax authority will accept an uncertain tax treatment or a group of uncertain tax treatments, it reflects the effect of the uncertainty in determining taxable profit or loss, tax bases, unused tax losses, unused tax credits or tax rates. The Group measures the effect of the uncertainty in income tax using either the expected value method, where there is a wide range of possible outcomes, or the most likely amount method, where the outcome is binary or concentrated on a single value. Where the tax asset or liability determined under these criteria exceeds the amount presented in the tax returns, it is presented as current or non current in the consolidated statement of financial position based on the expected timing of recovery or settlement and includes, where applicable, the corresponding late payment interest accrued in the consolidated income statement. The Group accounts for changes in facts and circumstances relating to tax uncertainties as changes in estimates.

The Group offsets current income tax assets and liabilities only when it has a legally enforceable right to offset the amounts with the tax authorities and intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously.

The Group offsets deferred tax assets and liabilities only when it has a legally enforceable right to offset current tax assets and liabilities with the tax authorities and the deferred tax assets and liabilities relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities that intend either to settle current tax assets and liabilities on a net basis or to realise the assets and settle the liabilities simultaneously in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

Deferred tax assets and liabilities are presented in the consolidated statement of financial position as non current assets or non current liabilities, irrespective of the expected timing of their realisation or settlement.

2.20 Share based employee payments

The Group operates a long-term incentive plan (LTIP 2020) under which share options have been granted to employees of the Group.

LTIP 2020 - background

Up to and including 2024, options granted under the LTIP 2020 could only be settled through the issuance of equity instruments of the Parent Company. Accordingly, these awards were accounted for as equity-settled share-based payments in accordance with IFRS 2.

The Group's compensation plan establishes the following vesting conditions: (i) the beneficiary must be an employee providing services to the Group; and (ii) the beneficiary must remain in continuous employment for a period of three years. Specific arrangements may exist with senior management and members of the Board of Directors under which their options remain outstanding for a longer period (see Note 24).

Equity instruments granted in exchange for services rendered by employees of the Group are measured by reference to the fair value of the equity instruments granted using the Black-Scholes valuation model.

When the awards are accounted for as equity-settled share-based payments, the fair value is determined at the grant date and recognised over the vesting period without subsequent remeasurement.

Market conditions and other non-vesting conditions, such as non-transferability, exercise restrictions and expected behavioural patterns, are considered in measuring the fair value of the instrument. Other vesting conditions are considered by adjusting the number of equity instruments included in the measurement of the transaction amount, so that the amount recognised for services received is ultimately based on the number of equity instruments that eventually vest.

Accordingly, the Group recognises the amount for services received over the vesting period based on the best estimate of the number of instruments expected to vest and revises that estimate to reflect the number of instruments expected to vest.

Once the services received and the corresponding increase in equity have been recognised, no further adjustments are made to equity after the vesting date, without prejudice to any reclassifications within equity.

If the Group withholds equity instruments to settle the employee's income tax liability with the tax authorities, the plan is treated in its entirety as equity-settled, except for the portion of the instruments withheld that exceeds the fair value of the tax obligation.

Under current Spanish tax legislation, share-based employee payments are deductible for income tax purposes based on the intrinsic value of the share options at the date they are exercised, giving rise to a deductible temporary difference equal to the difference between the amount that the tax authorities will allow as a deduction in the future and the nil carrying amount of the share-based payments. At the reporting date, the Group estimates the future tax deduction based on the share price at that date. The amount of the tax deduction is recognised as current or deferred income tax in profit or loss, with any excess recognised in equity.

Changes introduced during 2025

During 2025 several changes were introduced in the Group's share-based compensation arrangements.

In May 2025 the Board of Directors approved an amendment to the LTIP 2020 introducing Rule 6.2.2A, which allows the Board, at its discretion, to settle the exercise of options granted to non C-Suite employees in cash instead of issuing equity instruments.

Following this amendment, the Board approved a number of authorisations allowing the settlement of option exercises in cash for non C-Suite employees:

- On 23 June 2025 the Board authorised cash settlement of option exercises up to an aggregate amount of €500,000.

- On 11 August 2025 the authorised amount was increased to €1 million.

- On 9 September 2025 the Board approved an additional €2 million, increasing the total authorised amount for cash settlement to €3 million.

The amount of €3 million represents a maximum aggregate limit approved by the Board and does not constitute a recurring or annual amount.

During 2025, option exercises by non C-Suite employees were settled in cash, resulting in total payments of €2.5 million.

In addition, during 2025 the Group granted share awards to members of the C-Suite. These awards are settled through the issuance of equity instruments and their vesting is subject to the achievement of market and non-market performance conditions.

Furthermore, the Group introduced a deferred cash incentive arrangement for non C-Suite employees under which participants are granted units that are economically linked to the Company's share price but that are settled exclusively in cash.

Accounting treatment

Equity-settled share-based payments

Employee payments settled through the issue of equity instruments are accounted for as follows:

- If the equity instruments granted vest immediately at the grant date, the services received are recognised in profit or loss with a corresponding increase in equity.