Atalaya Mining (ATYM) is facing a demand for an immediate payment of €53m (£47m) and further “uptick payments” of €15.9m from a Switzerland-based counterparty. Astor Management, which signed a deferred consideration agreement with Atalaya to develop the Riotinto project a decade ago, claims the Spanish copper group now has sufficient cash to make court-ordered reimbursements.
At the start of November, the UK Court of Appeal upheld a March 2017 ruling that stated that any “excess cash” generated by the subsidiary that runs Atalaya’s Riotinto copper project in Andalucia must be returned to Astor. The judgement also upheld last year’s High Court ruling, which found that Atalaya did not have to pay lump sum or catch-up payments to Astor, lifting a significant weight from the Spanish copper producer's future costs.
According to Atalaya, the latest judgement means that, aside from $10m a year “for non-Proyecto Riotinto related expenses”, its subsidiary “cannot make any distribution or any repayment” to its holding company until the deferred consideration payment to Astor is complete. Astor has also approached Atalaya's lawyers for “uptick payments” of €15.9m.
Since this month’s judgement, Atalaya shares have fallen a fifth, despite a small rise in the copper price.
Atalaya declined to comment on Astor’s demand, but the copper miner welcomed the Court of Appeal decision on 1 November, and chief executive Alberto Lavandeira said the result “provided a level of certainty with regard to Astor”.
That certainty has not yet extended to the definition of “excess cash”, as determined by the two parties, particularly as the Court of Appeal did not set any parameters. A lump payment, as demanded by Astor, is not understood to be on the table.
