Berenberg hikes target price on Atalaya Mining following FY update

(Sharecast News) - Analysts at Berenberg hiked their target price on copper producer Atalaya Mining from 930p to 1,000p on Thursday, after the group's fourth quarter and full-year operational update a day earlier saw it hit the upper end of its FY25 production guidance range.

In Q4, Atalaya mined 3.9m tonnes of ore, lighter than Berenberg's 4.3mt forecast, although it did come in ahead on mill processing - delivering 4.1mt of ore versus its 3.6mt forecast. Copper grade of 0.33% was slightly below Berenberg's 0.36% estimate, which was greatly offset by improved recoveries of roughly 83.9%, resulting in a record annual mill throughput of 16.6mt.

Copper production of approximately 11,500 tonnes in Q4 brought full-year production to 51,100 tonnes in FY25, beating Berenberg's 50,700 tonnes estimate and coming in at the top end of Atalaya's FY25 guidance range of 49,000-52,000 tonnes. Q4 sales of 11,800 tonnes were also ahead of its 11,100 tonnes forecast, as Atalaya continued to benefit from rising copper prices.

The German bank, which has a 'buy' rating on the stock, also noted that Atalaya had provided FY26 guidance for its Proyecto Riotinto project in Spain, with the group expecting to mine 15.5m-16m tonnes of ore, while waste mined at Cerro Colorado was pegged to be 38m-44m tonnes, ore processed was expected to come in at 15.5m-16m tonnes, and copper grade was seen at 0.38-0.41%. Overall copper production was also expected to be 50,000-54,000 tonnes, with H226 production forecast to be roughly 10% higher than H126.

"We update our model for the Q4 results and tweak our estimates to reflect the FY26 guidance. We value Atalaya using a blended 1.33x NAV and 9x NTM EBITDA (previously 8x EV/EBITDA) to reflect premium valuations being afforded to copper names," said Berenberg.

Reporting by Iain Gilbert at Sharecast.com