The regional government of Galicia, Spain, has turned down the environmental impact statement (EIS) for Aim- and TSX-listed Atalaya Mining’s Proyecto Touro project, citing concern over the mine’s impact on the Ulla river and related protected ecosystems.

The company on Wednesday said that it noted a press release from Galicia, which said that a negative EIS had been signed and that it would be formally communicated to the Mines, Energy and Industry Department of the Xunta de Galicia.

Atalaya said that the release stated that the decision was based on two reports, which formed part of a wider evaluation consisting of fifteen reports produced by different departments of the Xunta de Galicia. These two reports challenge the ability of the company to guarantee that there will be no environmental impact of the project on the Ulla river and ecosystems which were located downstream.

The Proyecto Touro copper project comprises several deposits of which four – Arinteiro, Vieiro, Bama and Brandelos – have previously been mined; and two – Monte de las Minas and Arca – have not been mined.

According to a 2018 prefeasibility study (PFS), the project has proven and probable reserves of 90.91-million tonnes grading 0.43% copper, for contained copper of 392 000 t. The PFS envisages the construction of an openpit mine and concentrator, with average yearly production of 30 000 t of copper and 70 000 oz of silver in concentrate.

The proposed flowsheet uses conventional crushing and semiautogenous/ball mill grinding, followed by a flotation recovery circuit and concentrate thickening and filtration.

The concentrator and associated service facilities are designed for an initial Phase 1 plant of six-million tonnes a year and then a Phase 2 upgrade to increase plant throughput to ten-million tonnes a year before Year 8.

The project will use in-pit tailings disposal for a substantial part of the mine life, owing to the multiple pit mine operating plan.

During the initial years of operation, tailings will be stored in a surface tailings management facility (TMF). After Year 8, tailings will be stored in the exhausted Vieiro and Arinteiro openpits. The surface TMF will have an impervious liner and a capacity of 44-million tonnes of tailings, while the in-pit TMF will store 47-million tonnes of tailings. 

"Proyecto Touro has been designed with a fully lined tailings storage facility, constructed downstream using compacted rocks and with a guaranteed zero discharge policy following international standards and best practice.

"We are very surprised by the public statements made by the representative of the Environmental Department of the Xunta de Galicia.

"We will continue to explore all possible avenues to develop the Proyecto Touro and shall build on the excellent work performed by a very large team of world-class specialists, including all the Universities of Galicia, for over two years and containing over 15 000 pages of reports, all of which have been questioned without the company being further consulted,” said CEO Alberto Lavandeira.

The company is awaiting the formal communication from the Xunta de Galicia. In the meantime the company, along with its advisers, will evaluate potential next steps for the project, which could include an appeal of the decision made by the Xunta de Galicia, and/or the clarification of the questions raised by the reports.

Shares in Atalaya traded 8% lower at 190p each in London at 08:47 GMT.