Atalaya Mining Copper, S.A. (ATYM) Earnings Call Transcript & Summary

Good morning, and welcome to the Atalaya Mining Plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish answers where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand over to CEO, Alberto Lavandeira. Good morning to you.

Good morning. Thank you very much. Thank you for everybody for being here. And first, let me apologize for not having my camera on. It looks like we have some -- I'm here. I have -- we have low speed for some reasons. So in order to preserve the quality of the presentation, we have taken it off. With me, I also have César Sánchez, the CFO of the company. So let me here would be to kind of review as a short presentation, the results of the first quarter. And especially and as usual, try to answer as many of possible all of the questions that we have received. So if I may advance through the presentation, as I said, I have César Sánchez also with us. I think the first quarter has been quite a good quarter, a positive start. I mean it's not probably not the best. It looks like we have started in a slow mode from a production point of view since we only produced 140,000 tonnes of copper, but this was due to the advancing of managing of maintenance plan that we have for April. And I can report here, I think I have said it in public already that in April, we more than recovered the lost production in March and so far, May is going very well. And as a result of that, we have kept our outlook, and we believe we are going to be as expected. Cash costs and all-in sustaining costs have improved versus previous year and especially when you compare to the equivalent quarter of 2022. If you remember well, the electricity prices then were very high. As a result of those improvements and although even that we don't have good copper price as we had the first quarter of last year, we generated a positive EBITDA of around EUR 24.4 million, around $25 million than more $26 million. And we kept a very good balance sheet. We know that even after continuing to invest in the solar plant and E-LIX and repaying some of our medium term borrowing. One of the things somebody has asked and we will respond is that we decided to go away from the Toronto Stock Exchange. And I may advance now that simply the risk for this has been cost savings because we didn't have any significant volume and the big shareholder we have in Canada in any case, they didn't mind staying only with AIM. So this is simply a cost-cutting exercise, no other reading from that you may have. From the assets point of view, we have announced the results of the PEA at Riotinto. This -- I will try to elaborate a little bit on this because I think that supports the growth of this company in the next few years. And we continue with the construction of E-LIX plant and the 50 megawatts solar plant. We also received the authorization and approval of the AAU Masa Valverde. And we also announced -- but without a big an announcement because it was post quarter, there was even of an AAU to expand Riotinto mine. From other point of view, ESG point of view, safety -- health and safety, our metrics have been continuing very good. We had a couple of months with any lost time accident. We have been working with initiatives of restoration, the water streams of Touro, which are essential to get the permits there. And after the closing of the quarter, we also announced the filing of an ESG report that is in our web page. So going directly into these details in the graph that I would like to show, you can see how the throughput in the right side columns, throughput of the mill has been more or less constant. 1 week stopped, as we said before, which compares similar to first quarter of 2022, 1 week stop due to maintenance recovery as usual and copper production consistent with this stop. And as I said, this copper recovery in April has more than compensated what we had in the first quarter. Besides that, grades and throughput recoveries and so on have been quite consistent with the results. Revenues slightly lower than previous quarters due to the lower production, but similar and EBITDA going up again versus the third quarter. And as I said, net cash position, this is an important thing, has remained healthy. The working capital surplus is EUR 85 million, better than -- or similar to what we had in last year. And with the cash position at that time of EUR 120 million, as we speak, right now is higher than that. So we are in a much better position than we used to be in the past. I should probably remind those that not so much the company, how this last 2 years have been quite a big change since we finalized the expansion of the plant. And you can see that in the bottom graph in Slide 8, where immediately after the expansion was finalized, the cash flow generation was very good, which allowed us to pay a dividend in the last year -- sorry, previous year and also to pay our remaining debt to Astor when we close that file once and forever. So we have started to give some additional details in our cash costs so that people can follow up the evolution of our company, how things are going. And I think the only thing to highlight here is that there's a significant decrease, as you can see in process costs. Process cost includes electricity. Electricity was the reason for -- the main reason of the higher costs last year, and this seems to be getting to an end. And finally, we are back again to kind of normal costs. We still have some resilient higher operating costs in things like lime, explosive, diesel also going down, but they were still there in 2023 in the first quarter. We will see improvements in these costs during the second quarter. Explosives seems to be going down in correlation to the gas prices -- the international gas prices to remind you, reached levels of EUR 300 per megawatt hour in August last year. And recently, the European gas prices have been in the range of EUR 32. So it's like 10x lower than that. And the Spanish prices have been around EUR 25 so even lower than that. Those gas prices have immediate influence in the electricity prices. So as a result of that, our all-in sustaining costs are substantially lower than the equivalent quarter last year, and it should be much better in the next quarter, which I expect it to be much better due to higher production, which means divided by your fixed cost by larger units of copper, but also due to the reduction of the main components of consumables that I mentioned before, explosives, diesel, steel, lime and mainly electricity. Electricity is shown in Slide 10. We have continued to show this several times, and you can see the evolution in the other part of the graph of the electricity prices in the years before 2022. In '21, we were covered because we had a 1.5 years contract. '22 we're exposed, and how is 23 going? Well, we started obviously with a much lower price than 2022, but we also started with a PPA that we have signed in the early part of 2022. So 1/3 of our costs have been covered around EUR 54, which is not line that you see there, dark line. And in the lower part of the slide, you will see a green line is the evolution of the spot prices. As we speak today, this week, the prices in Spain have been around EUR 54, EUR 55, EUR 50 in that range due to the high influence of the wind, which has been very high in the last couple of weeks and also due to the solar influence, which is the higher now in this close to summer. Tomorrow, we are going to be in the range of EUR 60. As you can see, these sort of numbers are basically the normal numbers that we had prior to 2022. So we expect an even higher decline of the cost of energy and as a result, the cost per pound in the second quarter of this year. And I also expect this to continue during the rest of the year due to the huge construction activities of solar and wind in Spain. Actually, this last week, we had 1 day where all of the production in Spain was produced with a no CO2 origin, 20% nuclear and the rest coming from wind and solar. So this is the tendency in the future in Spain, and I think it's good news for the company. So a result of all this, our guidance, we still -- we are still maintaining our guidance of costs of around EUR 3 to EUR 3.20 for the year. But it looked like this is probably the high-end because we had assumed market prices of EUR 100 to EUR 150 to be conservative. But during the first quarter, we had a close to EUR 100. But in the second quarter so far, we are quite below EUR 100, so probably in the EUR 70 level, EUR 80 level. So we expect to see a lower influencing our costs. From the production point of view, we continue to point to the mid-range of 54,000. That's what our projections are showing now. So if things go correctly, in this half of the remaining of the second quarter will be more or less in the 54,000 tonnes of copper produced. Let me speak a little bit about PPA and where are we going. Several things from the reduction of point of cost are initiatives that we are doing, as I spoke before, the solar plant, construction of the E-LIX plant, which is the first kind of -- first industrial plant of leaching technology to produce metal directly. And the most important thing has been the release of the results of the PEA of San Antonio and San Dionisio and the continued permitting stages of Touro. Besides that, we have other projects called Valverde and Ossa Morena, which are in Riotinto East we continue to drill, and we have 4 rigs working there. The most important thing is really the -- let me, before I go to the PEA, let me finish with the 50 megawatts solar plant. Civils are ready. They are working the solar station right now in the bottom corner of the picture, you see all the panels that are there. And hopefully, next time we meet, we will be showing all these panels on top of the surface. The start-up data has been given by the construction companies the last quarter of this year. With a little bit delayed from before, basically because they had too much work that's to be honest the reality. E-LIX is almost the same thing. This picture is probably a bit old, but the construction is advancing and all of the equipment is there. We had 30 persons visiting investors visited the site last week. They could see the amount of equipment that was there. Still, the activity is not a full steam, and we -- but we still have to expect listing to start processing some concentrates in the second part of the year, although I believe it's going to be closer to the mid part of the second half, so end of summer. This is with the way I see it personally. And we continue to explore, as I said before. We have 4 rigs right now, 5th being added, drilling at Masa Valverde satellites. At Riotinto East, we have also 1 rig there and an iron IOCG, so basically copper gold project in Ossa Morena, where we have another rig right now and maybe we'll move a second one. But the important thing here is to speak a little bit about the value generation of the PEAof Riotinto. We have a huge mill, a large mill working efficiently in the last 8 years. Besides that, left and right on the picture, which is west and east, we have San Dionisio and San Antonio, which are 2 satellite deposits that were known that we have been drilling, and Cerro Colorado is our existing pit. Besides that, we have another satellite Masa Valverde, around 29 kilometers south. So obviously, we said, what can we do with this? The idea is that since at Cerro Colorado, we have around 0.9 million tonnes, but when -- of copper, or copper equivalent. But when you start adding what we have in San Dionisio, Masa Valverde, San Antonio, even without Touro, we are getting close to over 4 million tonnes of copper. So almost 4x what we have existing reserves. And the most important thing here is what you see in the right side of the picture where our grades are around 0.4 at the existing pit. But in the other satellite areas of San Dionisio, San Antonio, both open pit and underground, the grades are much higher and some of them contain in addition to that thing. So we have some obvious choice to say, how can we exploit Cerro Colorado but bring as soon as possible the San Dionisio into production. So what's an issue, and what's the global PEAof an integrated plan? It's basically what you see in this picture. We have an existing pit which if it was alone, it would be running for around 10 years. But let's say, in the far east, which is the far end of the pit, around 1 kilometer away, we have the San Antonio deposit, which has higher copper grade and zinc and west of it is the old San Antonio, which is the [indiscernible] pit where previous owners were mining very high copper and then left in the side of the wall, things with around 0.9% copper. Obviously, this grade is double than what we have in the existing pit. So we should -- obviously, we should try to integrate this as soon as possible. How does it look when you made a kind of vertical section where you -- when you cut this pit vertically and make a slice? It looks like this. So in the left side, you will see the existing pit and you will see some red things, which is high grade has red is over 1% copper that has been left in the site. That was considered low grade in the past. And basically, what we are doing some it's logical to do a pushback. In the centers, what we currently are mining, which is Cerro Colorado pit. And on the right side, you see a kind of semi-horizontal dip into the right dip into the east, also with nice red colors over 1%, which is San Antonio. 2 things you can notice here first of all, how close they are. So with only 1 kilometer, you can go from 1 pit to the next. And the other one in San Dionisio itself is basically the expansion of the existing pit. So when we put all these things together, we get a plan which is shown -- by the way, this PEA is in our web page. We get a plan that is shown in Slide 21. What does all these colors mean? In the lower part, means basically you see green and gray. Green means copper material, gray means copper plus zinc. And the first thing you notice is that in the first, next 4 years, including this one, we will only be processing mainly copper only. But on the upper part, you see green being Cerro Colorado, our existing pit. And then in other colors, blackish and grayish is the production coming from the solar satellites of San Dionisio and San Antonio. So the first thing you notice is that you already have some mining this in San Dionisio, but copper only in '24, '25, '26. This means 2 things. It means that we can start next year already bringing this high-grade material into the pit. And second thing, it means that we don't have to make any modification of the plant during the next 4 years. It also means that before the end of '26, we should have already zinc circuit installed some way to recover the zinc at Cerro Colorado. There has implications in the CapEx required to do this expansion of the zinc circuit is back-ended towards '26. Of course, we can advance it, but also we can -- we have flexibility to delay it if needed because we always have the feed from the existing pit. And this is very important, because it's not an underground mine where you are dependent on an exit in 1 single entry. This is something that gives you lots of flexibility because in an open pit, in order to produce more, you only need to put trucks and move machines from one place to another. Flexibility on an open pit is very important. As a result of that, you get the production profile that you see in the slide. You will notice that the production is going towards over 60,000 tonnes of copper in the next 4 years. And then beyond that, it's even higher when you add the zinc circuit. Some people have highlighted and noticed that in 2024, it looks like we are -- our production is low, but also, please note that this was based on the study done by Tetra Tech, and they were also showing much higher production in '23, close to 60,000 tonnes. The reality is that it will be much more smooth. It will be like we are point in our guidance around 54,000 tonnes, 55,000 tonnes for both years. So what we shown here in this graph in '23, shown higher in '23, '24 lower actually will be similar. If possible, we will try to bring higher rates from '25, '26 from this high grade that I mentioned in the previous report forward. Anyway, being what it is non-optimized, the result of this different copper prices are shown in the lower slide. They are shown with after-tax net present value, which means cash flows. And it's important to note that EBITDA $350 million copper price flat, which is even lower than what we have for 15 years. By the way, surprised that I don't see it achievable, impossible to happen. It's not in the world. The discounted cash flow at 8% will be over $1 billion, which has doubled our market cap. And undiscounted, which is really what counts to give out dividends is over $2.1 billion, so, which is 4x less than our market cap. At a normalized price that we believe is more close to the consensus -- actually consensus of most analysts now getting long term in the $4.20, $4.25 comprise, these figures go up to $1.5 billion discounted at 8%, which is 5x or 3x our market cap and $3 billion undiscounted which is 6x. Remember, this does not include any additional ton from our satellite deposits of Masa Valverde, any new discovery or any addition of Touro. So I think it's a very positive outcome, especially when you compare with other projects that are being built or launched elsewhere, where the net present value that's shown sometimes of $1.5 billion, $2 billion often comes with a CapEx of also $1 billion to $2 billion. And this net present values are shown from the day of the start, which, in our case, is immediate and in other cases probably 5, 6 years away. Another focus of potential is Touro. It's always delayed. Things are progressing, although very slowly from our point of view. It's on us [indiscernible] as an old system where the quarry is working. And things that have been moving in this last year is the water treatment plant, which is up and running. The rivers are now clean and administration is totally positive with us right now. A big change, which is probably what I wanted to highlight in this presentation is this is in late March, we had a gathering with over 3,000 people saying yes to the mine from all the villages, having a kind of party in a peaceful demonstration of support. This is a very unique -- of course, this was followed by the local TV and local newspapers and there was a real show to the politicians that there was full support in the area. And the noisy people against the mine were basically 8 persons making a lot of noise. We believe this is the case in the area. We respect all the views of the people that do not want any mining. That's fine. But we have been slowly showing the benefits of the project, cleaning the rivers to make sure nobody can point to us. And this we have done before the permits, which was -- is a kind of unprecedented, I would say. The normal case would be that as part of your construction, you will be cleaning the rivers part of the taking over the past liabilities that assisting on site. And since there was a lack of credibility of those opposing the project saying yes, but they will never do it, we decided to do it ahead of the project at our own cost and own risk. So I believe that this has been preceded by the administration, and things are going in the right direction. Permitting takes time, but eventually, we would succeed. With all those things, our production profile will be looking how as shown in Slide 26. From the current level of around 55,000 tonnes of copper, we will be close to the 60,000 tonnes just from Riotinto. And then going over 90,000 tonnes of copper that's when we get into the new areas of San Dionisio. And with Touro coming on stream, which hopefully can be in the next 2 years, we can get over 30,000 additional tonnes of copper, putting our company in around 120,000 tonnes of copper, which is substantially higher than the 20,000 tonnes that we started just 7, 8 years ago. So the growth profile is very high. I have other slides that are there some backup in the presentation, and -- but I don't want to make this too long. So I believe that the best thing is to go to the question-and-answer session.

Alberto, thank you very much indeed for your presentation. [Operator Instructions] I'll remind you that a recording of this presentation, along with a copy of the slides and the Polish Q&A can be accessed for our investor dashboard. As you can see, we have received a number of questions throughout today's presentation, and thank you to all investors for submitting their questions. Alberto, if I may hand back to you and kindly ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

Excellent. Yes. As you saw, I will try to respond to all of them if I have data otherwise, I can get César to help me a little bit. So the first question I see here is the dividend policy. In arriving at free cash flow for the purpose of applying it to the dividend policy, will it not be sensible to add back the effect of movements in working capital, which may result and have done so in Q1 '23 -- may result in a considerable distortion of the performance. Well, that's correct. Normally, the movements of working capital are mainly related to timing differences. So this is something that's in Q1, there was a lot of outflow, which reduced apparently the free cash flow, but this is just timing. On a normal basis, you will not see this. So -- and dividends are normally calculated on annual free cash flow. So this chart movements shouldn't be a problem, should not be material in any way. So we don't consider the effect of what happened in Q1 as a normalized situation. The second question I see is there is no mention of the transfer company to U.K. residency and a transfer to U.K. market. Can you provide an update, please? Well, absolutely, yes. With the company remains fully committed to move to the main market, and I have to say that we have found some difficulties. There's no specific timing yet, but our goal, internal goals and goals by the Board is to have this, this year in '23. We have had some delays due to the situation with Cyprus being in Europe and the Brexit. When we try to do it how it was planned, we saw that there would be a tax -- there would have some tax implication that would not -- that would result in some shareholders having to pay some tax due to a potential profit without really selling shares. We are going around that. And all the paperwork is being completed by doing it in some other way, redomiciling out of Cyprus, but to a new European country, but we've remain fully committed to go to the main market, and we are completing all the paperwork that's needed. And we believe we are hoping to have this before the year-end. The next question is I noted recently that the [indiscernible] approved the expanded environmental authorization. It's called the [indiscernible] Riotinto. This is very significant as it doubles the mine life and allows the expansion. It was significant enough to be an official [indiscernible] yet we have had no acknowledgment from Atalaya for an official awareness. Surely, this should be broadcast as it's significant to the very future of the company and the secure status -- and its secure status and future expansion. Also, investors would definitely want to know and that includes potential new investors. Will we have an announcement? Actually, it's a very good point. It's a very good point and a fair comment. The announcement in the official gazette is the approval of the environmental authorization, which allows all these things as expansion of Riotinto. The most important thing is it allows the use of additional tailings, which means all these San Dionisio or Masa Valverde higher, larger disturbed land, and it opens the door for future development of this PEA. We didn't make an official announcement as such itself because it's basically the continuation of the status quo, maybe we should have done it. That said, we are going to -- it's important that we are going to be releasing when we receive the mining permit to all these things. And the reason for that is because this mining permit may include conditions or not, that would be applied to the environmental authorization. Right now, the steps in -- according to the Spanish legislation is that you get this environmental authorization. And after that, the only conditions to get the approval is to have a financial and technical capability, which are quite clear. Once we receive this final documentation from the mine department, which is not announced publicly, the environmental authorizations do need to be announced publicly because they go to public consultation, then we will make the whole announcement. I should address, as you mention here that tells you that how permits are obtained in Spain and [indiscernible] regularly. Actually, we obtained the AAU for San Dionisio. We obtained AAU for [indiscernible] expansion, which will include San Dionisio and also obtain the one AAU for some -- for Masa Valverde. And we obtained many more that we don't even announce like the construction of the E-LIX plant or removal of some of the old installations, lots of things that would be -- we would be announcing permits every day we had to submit this. But the point is taken, and we will announce when we receive the whole thing which probably will be in the next following weeks. At Touro, there seems to be a long-term delay. Surely, the new environmental impact assessment has been completed, but not filed yet. That's over 3 years in the making to win this. It's going to be filed in '23. Other mining companies in Galicia had their license approved since 2020. Yes, that's again also fair point. Other companies had got their permits, specifically lots of quarries. And 1 international, 1 will be an open pit mining, 10 and tantalum in the western -- southwest of Galicia. Yes, we are submitting the project in '23. And the reason of these delays have been to make sure we got the social license, which is something not written but factual because the project in the past in 2020 was not rejected based on any technical reality. It was based on impression that things were going to be -- turn wrong that the water problems were not going to be fixed, that the water problem was going to be -- the water problems were going to affect the sea, and it has taken a long time to explain everybody in all the counties, municipalities, downstream, in the rivers how there was no influence and then the water treatment plant to have it up and running and to make sure that the rivers were clean to demonstrate that. And now I don't think it will be an excuse or any further delays from the [indiscernible]. So we expect to be -- to see this project, which is, we believe, is strategic for Galicia. We believe it's of critical importance due to the size of the investment. Also because the European Union has included copper in the critical materials. So it would be very difficult not to say no when you have a resource that you can mine. And saying no to this project would mean for the [indiscernible] Galicia to admit that they don't have technicians ordering Galicia. There are no technicians and good companies to operate this, which we don't believe is the case because it's a country, which, by the way, is where I am from that has excellent technical people. So I think this year will be the year. And yes, things are slow, unfortunately, but we are taking all the steps to make sure there's no more failures in this case. The next question is I own most of my holding in Canada, and they will still seem to be pricing Canadian dollars. Was the move away from the TSX apart from extreme low volume of trading to allow Atalaya 2 into the LSE London Stock Exchange fully rather than named? And if so when. We have been told '21 that we would move and we are moving in '23? While I have partially replied to this question before. There was no specific reason to go away from TSX to go to London. It was more -- it is more relation to saving costs but also helps. But the company, as I said, remains fully committed to move to the main market. It has been going for some time. But as I said before, the problem has been the tax issues that have arise and had -- we had to change totally the way we are doing another European location because according to Cyprus listed would help. Electricity prices looks -- the next question is electricity price looks to be almost back to normal. Do you see rigs that prices go up again in winter? Have you considered hedging more electricity won't repeat the price we saw in '22. Yes, we continue to monitor the electricity prices. So the futures now 10 years, starting next year are around 59, which is a decent price, but we believe that the long-term prices in Spain are going to be in the range of 50. So we will see a bottom like we saw last year in February. We will probably take an opportunity there. But from the way things seem to be going, the problem of gas in Europe has been sorted out. The prices of electricity are set by the marginal cost producer, which is gas. The gas prices in Spain, as I said, have gone sub-30. The price of electricity is the multiplication. It's basically double the gas price plus some CO2 rights. So in theory, the most expensive times would be in the ranges of the 60 to 80. But during day times, due to the high solar influence and due to the wind, we will see much lower prices, sometimes even 0. So it looks like that we are not going to be repeating in winter for sure. But especially in the peak of summer, we are not going to be seeing the repetition of last year. But we continue, by the way, to look at other possibilities of installing additional power like the wind, and that's something that we have not closed yet to generate our own wind energy within our property, which will help us reduce not only carbon footprint ourselves, but also to stabilize the electricity prices. Wind turbines in our area give you an average price of around 40 to 50 depends on the depreciation period. The next question is also related to electricity is that how -- now that the electricity is much lower, why are cash costs not falling faster? Are cost is still high? Which ones? Well, I have mentioned before that you can see in the presentation that the costs have been reduced quite a lot, like $0.50, $0.60 per pound only due to electricity and other things. Other components are diesel, explosives, lime. Lime is still linked with the gas price and it's going down. Explosives is also linked with gas prices. And just to give you an idea, before the crisis, we were paying a price of around EUR 0.7, that's euros, around that. When the crisis hit in the peak, we were paying EUR 1.40, so double. And now they are going to EUR 1. So it's still 40% lower than the peak but still higher than EUR 0.7. That tends to be to go back to that level. But as you may understand, lots of people are -- when they put the prices up, they're very slow in putting them down. In diesel prices is linked to international market, the prices are going slower down. But the main important one is electricity, and this seems to be going in the right way. Other things like steel, balls, we are buying them worldwide. So we are getting, for example, from Indonesia, our lines of the mills, and they have cheap electricity or cheaper gas or cheap heating, and we get quite normalized prices. The copper price has been falling recently. Does this concern you at all. On the other hand, the big mines like BHP sound very bullish and copper, and we have seen lots of M&A activity. Should we be optimistic or cautious at this time? Well, this is a -- there's still question about the future. Look, we are optimistic because this indication of the big companies buying other is just showing you that they have the balance sheet, but they don't have the time. They prefer to buy versus building simply because it's much faster. And that shows you the difficult condition that we are in the market. I don't know the predictions of BHP, Glencore Tech, we have seen recently, they are all showing at the end of this decade, which is only 6 years away, by the way. 6 years is nothing. We are seeing definitely people say 6 million per year, 4 million per year. Whatever is the case, if it's 5 million per year, it's 1 billion, it's 5 mines larger than the largest in the world in the next 6 years. It's simply not possible. It's simply not possible. So the copper price in these 5 years will have to go up so much in order to remove consumption, but there are some things that simply cannot be changed, like copper wiring in cars. They may reduce the amount, but they will not change the use of it or the copper wiring in some motors and windmills. So this move of general -- of the whole world into non-carbon generation is going to be pushing hard not only in China, and it's something that will happen. Recently, this has been a little bit slow because of the not so good figures of China, which is taking longer than expected, but it's already happening. And actually, the stocks are extremely low. So I'm very optimistic that we will not see very low copper price in the future. Could we have an update of moving to the main Board? The last delays were blamed on Brexit, making things more complicated. However, would you please make it more of a our priority, put more resources in the 2 in the main Board listing? We do not agree that being a name is probably holding the share price possibility. Yes, I think I've spoken about this, but it's 100% right. Some funds and institutions cannot buy a name. And we have had lots of meetings with the potential investors that told us this, and we are working on this. Unfortunately, things are very slow. But as I said, this is a high priority. What's holding here is the production of the competent person reports and all the documentation that's linked with this but working fast and with several group employers and advisers to have this as soon as possible. Which projects fall within the main rating operation for tax purposes and which will be taxed separately? I think all of them will be falling within a global company in Spain at Atalaya Riotinto Minera. We have several other companies, which are operational companies for exploration and so on, but everything falls into -- the main taxes are coming all to Atalaya Riotinto.

Alberto if I may ask here the way that it works in Spain is what we call the consolidated tax regime, which basically when some of the subsidiary meet some of the conditions, which, in our case, pretty much all of us [indiscernible] condition. We have presented a tax globally for the subsidiaries in Spain. So getting to the question specifically, the company which owns the Riotinto project, the processing plant, also Riotinto East deposit. And then we have other subsidiaries for Masa Valverde. Tax wise, they all consolidated together, which basically has some benefit about netting of some of the profit when you have some losses on a specific entity. So it's pretty neutral, and I think the Spanish tax office work quite well.

Thank you, César. The next question is, is the Astor 5 close? Do we have an open appeal? Also Astor is still collecting some premium of our output of Riotinto, when we move Astor? And what do we that when they stop paying Astor? The file of Astor is now closed. We still get what they call the marketing agreement where they have a small fee per tonne of concentrate, which is fixed now. And I believe this thing goes away in 3 years' time, more or less, between 2 and 3 years, depends on our production. After that, we'll be totally out of Astor. This marketing fee is included in our operating costs. When is the new solar capacity coming on stream? The last estimate of the construction companies in the third quarter of this year to connect. With the power cost of license introduction in consumers, would it be -- will the market expect to updated cost guidance for this year? Likely, yes. I would say that when we announced the second quarter results in initial summer, which we believe are going to be good. I think we will update our operating costs, which I expect them to be lower than what we have right now. That should reduce our dependence on electricity and gas prices. Have you stated how much reduction you will achieve? I suppose this refers to the first to the solar into the power agreement. The solar represents around 22% of our needs, which basically will come at 0 cost almost, and the power purchase agreement represents around 30% of our needs, which are around 54%, which means we will have around 50% of our needs kind of hedged or covered, let's say, around 40% because the cost of the solar is basically the capital costs, which is already in our balance sheet. Any update on the European Spain position in strategic assets like copper. This will result in tax breaks, what benefit would you expect? What do you want? And are you any lobbying in Europe and Spain? Yes, we are lobbying a lot. We are moving with that and not only us by the expanding association. The European Union has approved copper as part of the raw materials, which means it has what effect is that states have to take all the steps to reduce the time required to permit to construct things. So we expect this to have an important influence specifically in Touro because it would be very hard to justify not to do what the European Union is saying. Yes, go ahead.