Atalaya Mining is a copper mining company with two assets: an open-pit mine in Huelva (Rio Tinto) and mining project in Galicia (Touro). We believe that the share price does not reflect the intrinsic value of the company for several reasons.
Firstly, the company is not well known in the marketplace because, while its assets are in Spain, the company has its headquarters in Cyprus and is traded in London. Moreover, with a market cap of only 360 million euros, the company does not attract many market followers.
Another reason is the company’s administrative body, whom we’ve known for some years now, who will expand the annual production of the Rio Tinto mine, thus increasing the value of the mine with hardly any additional investments. When optimisation occurs, the results will improve and it is therefore reasonable to think that this will affect Atalaya’s listing.
By investing in Atalaya Mining (ATYM) we are investing in copper in a more profitable way. At a global level, we believe that the cooper price has good prospects, since we estimate that the future world copper needs cannot be met with the mines that are currently operating and the available copper stocks. Consequently, we believe that the price of copper should rise to encourage the development of new mines. When it rises, we will benefit from the higher margins of Atalaya.
From Francisco Garcia Parames' second quarter 2018 shareholder letter.
