Good morning, welcome to the Atalaya Mining PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press Send. The company may not be in a position to answer every question it receives during the meeting itself. The company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand over to the CEO, Alberto Lavandeira. Good morning to you.
Good morning. Thank you. Thank you very much. Thank you for everybody for being here. First, let me apologize for not having my camera on. I have, we have low speed for some reason, 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. The idea here would be to kind of review, it will be a short presentation, the results of the first quarter. Especially and as usual, try to answer as many of possible all of the questions that we have received. If I may advance through the presentation.
As I said, I have César Sánchez in also with us. I think the first quarter has been a quite good quarter. A positive start. I mean, it's not probably the, not the best. It looks like we have started in a slow mode from the production point of view since we only produced 12,140 tons of copper. This was due to the advancing of a maintenance plan that we have for April. 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. 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. Especially when you compare them 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 didn't have a good copper price as we had the first quarter of last year, we generated a positive EBIT of EUR 24.4 million, around $25 million, a bit more, $26 million. 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. I may advance now that simply the reason for this it has been cost savings because we didn't have any significant volume. The big shareholder we have in Canada, in any case, they didn't mind staying only with AIM. 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 Proyecto 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. We continued with the construction of E-LIX plant and the 50 MW solar plant.
We also received the authorization and approval of the AAU Masa Valverde. We also announced, but without a big announced announcement because it was post-quarter, the receiving of an AAU to expand Riotinto mine. From other points of view, ESG point of view, safety, health and safety, our metrics have been continuing very good. We had a couple of months without any lost time accident. We have been working with initiatives of restoration the water streams at Touro, which are essential to get the permits there. After the closing of the quarter, we also announced the filing of an ESG report that is in our webpage. Going directly into these details in the graph, 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. One week stopped, as we said before, which compares similar to first quarter of 2022. One week stop due to maintenance. Recovery as usual, and copper production consistent with this stop. 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. EBITDA going up again versus the third quarter. As I said, net cash position, this is the important thing, has remained healthy.
The working capital surplus is EUR 85 million, better than or similar to what we had in last year. With a cash position at that time, EUR 120 million. As we speak right now, it's higher than that. We are in a much better position than we used to be in the past. I should probably remind those that do not know so much the company, how this last two years have been quite a big change since we finalized the expansion of the plant. You can see that in the bottom graph in the slide eight , 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.
Well, sorry, previous year, and also to pay our remaining debt to Astor, where we closed that file once and forever. 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. I think the only thing to highlight here is that there's a significant decrease, as you can see, in process cost. Process cost includes electricity. Electricity was the main reason of the higher cost last year. This seems to be getting to an end. Finally, we are back again to kind of normal costs. We still have some resilient higher operating costs in things like lime, explosives, diesel. Also going down, but they were still there in 2023, 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. Recently, the European gas prices have been in the range of EUR 32, so it's like 10x lower than that. The Spanish gas prices have been around EUR 25, so even lower than that. Those gas prices have an immediate influence in the electricity prices.
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 dividing by your fixed cost by a larger units of copper. 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 upper part of the graph of the electricity prices in the years before 2022. In 2021, we were covered because we had a one-year-and-a-half contract. 2022, we're exposed. How is 2023 going?
We started obviously with a much lower price than EUR 22, but we also started with a PPA that we had signed in the early part of 2022. One-third of our costs have been covered, around EUR 54, which is that line that you see there, a dark line. In the lower part of the slide, you will see a green line, which 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. We expect an even higher decline of the cost of energy and as a result, the cost per pound in the, in the second quarter of this year. 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 one day where all of the production in Spain was produced with a known CO2 origin. 20% nuclear and the rest coming from wind and solar. This is the tendency in the future in Spain, and I think it's good news for the company.
A result of all this, our guidance, we are still maintaining our guidance of costs of around EUR 3.00-EUR 3.20 for the year. It looked like this is probably high end because we had assumed market prices of EUR 100-EUR 150 to be conservative. During the first quarter, we had 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. We expect to see a lower influence in 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.
If things go correctly, in this half of the remaining of the second quarter, we'll be more or less in the 54,000 tons of copper produced. Let me speak a little bit about the PEA and where are we going. Several things from the reduction of costs 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. The most important thing has been the release of the results of the PEA on San Antonio, San Dionisio, and the continued permitting stages of Toro.
Besides that, we have other projects called Valverde and Proyecto Ossa Morena, which are in Riotinto East, where we continue to drill, and we have four rigs working there. The most important thing is really the. Let me, before I go to the PA, let me finish with the 50 MW solar plant. Civils are ready. They're working in the substation right now. In the bottom corner of the picture, you see all the panels that are there. Hopefully next time we meet, we will be showing all these panels on top of the surface. The start-up date that has been given by the construction company is 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 visiting the site last week. They could see the amount of equipment that was there. Still the activity is not at full steam, but we still have to expect this thing to start processing some concentrates 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 the way I see it personally. We continue to explore. As I said before, we have four rigs right now, a fifth being added, drilling in at Masa Valverde satellites.
At Riotinto East, we have also one rig there and at an iron IOCG, so basically copper gold project in Proyecto Ossa Morena, where we have another rig right now, and maybe we'll move a second one. The important thing here is to speak a little bit about the value generation of the PA of Rio Tinto. We have a huge mill, a large mill, working efficiently in the last eight years. Besides that, left and right on the picture, which is west and east, we have San Dionisio and San Antonio, which are two satellite deposits that were known, that we have been drilling. At Cerro Colorado is our existing pit. Besides that, we have another satellite, Masa Valverde, around 29 km south.
Obviously we said, "What can we do with this?" The idea is that since at Cerro Colorado we have around 0.9 million tons of copper or copper equivalent. When you start adding what we have in San Dionisio, Masa Valverde, San Antonio, Alconchel, even without Toro, we are getting close to over four million tons of copper. Almost 4x what we have at existing reserves. The most important thing here is what you see in the right side of the picture, where our grades are around 0.4 at existing pit. 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, zinc.
It was an obvious choice to say, "Well, how can we exploit Cerro Colorado but bring as soon as possible the San Dionisio into production?" What's San Dionisio and what's the global PA of an integrated plan? It's basically what you see in this picture. We have an existing pit, which is if it was alone, it would be running for around 10 years. Let's say in the far east, which is the far end of the pit, around 1 km away, we have the San Antonio deposit, which has higher copper grade and zinc. West of it is the old San Antonio, which is the Corta Atalaya pit, where previous owners were mining very high copper, and they 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 try to integrate this as soon as possible. How does it look when you made a kind of vertical section? When you cut these pits vertically and make a slice. It looks like this. In the left side, you will see the existing pit, and you will see some red things, which is high grade. Red is over 1% copper that has been left in the side. That was considered low grade in the past. Basically, what we are doing, it sounds logical to do a pushback. In the center is what we currently are mining, which is the Cerro Colorado pit.
In 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 the San Antonio. Two things you can notice here. First of all, how close they are. With only 1 km, you can go from one pit to the next. The other one in San Dionisio itself is basically the expansion of the existing pit. When we put all this thing together, we get a plan which is shown summarized. By the way, this PA is in our, in our webpage. We get a plan that is shown in this slide 21. What all these colors mean? In the lower part means basically you see green and gray. Green means copper material. Gray means copper plus zinc.
The first thing you notice is that in the first next four years, including this one, we will only be processing mainly copper only. In the upper part, you see green being Cerro Colorado, our existing pit. Then in other colors, blackish and grays, is the production coming from the solar satellites of San Dionisio and San Antonio. The first thing you notice is that you already have some mining in the San Dionisio, but copper only in 2024, 2025, 2026. This means two things. It means that we can start next year already bringing this high-grade material into the pit. Second thing, it means that we don't have to make any modification of the plant during the next four years.
It also means that before the end of 2026, we should have already a zinc circuit installed some way to recover the zinc at Cerro Colorado. That has implications in the CapEx. The CapEx required to do this expansion of the zinc circuit is backended towards 2026. Of course, we can advance it, but also we have flexibility to delay it if needed because we always have the feed from the existing pit. This is very important because it's not an underground mine where you are dependent on an exit and one 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 the other. Flexibility of 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 tons of copper in the next four years. Beyond that, it's even higher when you add the zinc circuit. Some people have highlighted and noticed that into 2024, it looks like our production is low. Please note that this was based on the study done by Tetra Tech, and they were also showing much higher production in 2023, close to 60,000 tons. The reality that it will be much more smooth. It will be like we are pointing our guidance around 54,000 tons, 55,000 tons for both years. What we shown here in this graph in 2023, it's shown higher, and 2023, 2024 lower actually will be similar.
If possible, we'll try to bring higher grades from 2025, 2026 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. It's important to note that even at a EUR 3.50 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 EUR 1 billion, which is double that our market cap.
The undiscounted, which is really what counts to give out dividends, is over EUR 2.1 billion, which is four times less than our market cap. At a normalized price that we believe is more close to the consensus. Actually, the consensus of most analysts is now getting long-term in the $4.20-$4.25 copper price. These figures go up to EUR 1.5 billion discounted at 8%, which is three times our market cap and EUR 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 Toro. 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 EUR 1.5 billion, EUR 2 billion often comes with a CapEx also EUR 1 billion, EUR 2 billion. These net present values are shown from the day of the start, which in our case is immediate, and in their case is probably five, six years away. Another focus of potential is Touro. It's always delayed. Things are progressing, although very slowly from our point of view. As you probably all know, it's an old system where the quarry is working. Things that have been moving in this last year is the water treatment plant, which is up and running. The rivers are now clean. The administration is totally positive with us right now.
A big change, which is really 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. Of course, this was followed by the local TVs and local newspapers. It was a real show to the politicians that there was full support in the area. The noisy people against the mine were basically 8 persons making a lot of noise. We believe this is the case in their area. We respect all the views of the people that do not want any mining. That's fine.
We have been slowly showing the benefits of the project, cleaning the rivers to make sure nobody can point to us. This we have done before the permits, which 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 as part of the taking over the past liabilities that's existing on site. 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. I believe that this has been appreciated by the administration, and things are going in the right direction. Permitting takes time, eventually we will succeed.
With all those things, our production profile will be looking how it's shown in slide 26. From the current level of around 55,000 tons of copper, we will be close to the 60,000 tons just from Riotinto. Going over 90,000 tons of copper, that's when we get into the new areas of San Dionisio. With Touro coming on stream, which hopefully can be in the next two years, we can get over 30,000 tons, additional tons of copper. Putting our company in around 120,000 tons of copper, which is substantially higher than the 20,000 that we started just seven, eight years ago. The growth profile is very high.
I have other slides that are there as a backup in the presentation. I don't want to make this too long. I believe that the best thing is to go to the question and answer session.
Alberto, thank you very much indeed for your presentation. Ladies and gentlemen, please continue to submit your questions using the Q&A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via investor dashboard. Alberto, Cesar, 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 usual, I will try to respond to all of them if I have data. Otherwise, I can get César to help me a little bit. The first question I see here is the dividend policy. In arriving at free cash flow for the purposes of applying it to the dividend policy, would it not be sensible to add back the effect of movements in working capital which may result and have done so in Q1 2023. 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. This is something that in Q1 was a lower outflow, which reduced apparently the free cash flow, but this is just timing. In a normal basis, you would not see this.
Dividends are normally calculated on annual free cash flow. This short movement shouldn't be a problem, and it should not be material in any way. 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 of the company to U.K. residency and a transfer to U.K. market. Can you provide an update, please? Well, absolutely, yes. The company remains fully committed to move to the main market, and it's 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 year in 2023. We have had some delays due to the situation with Cyprus being in Europe and the Brexit.
When we tried to do it how it was planned, we saw that there would be a tax, it 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, re-domiciling out of Cyprus, but to a new European country. We've remained fully committed to go to the Main Market, and we are completing all the paperwork that's needed. We believe, we are hoping to have this before the year end. The next question is, I noted recently that the Junta de Andalucía approved the expanded environmental authorization. It's called AAU in Riotinto.
This is very significant as it doubles the mine life and allows the expansion. It was significant enough to be in the official bulletin of Andalucía, yet we have had no acknowledgments from Atalaya for an official awareness. Surely, this should be broadcast as it's significant to the very future of the company and 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, 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 PA. 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, it's important, we are going to be releasing when we receive the mining permit to all these things. 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. 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 mines department, which is not announced publicly, the environmental authorizations do need to be announced publicly because they go to public consultation. We will make the whole announcement. I should address, I should mention here that tells you that how permits are obtained in Spain, in Andalusia regularly. We obtained the AAU for San Dionisio. We obtained the AAU for Sorry, the expansion, which will include San Dionisio, and also obtained the one AAU for some for Masa Valverde.
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 we would be announcing permits every day if we had to submit this. The point is taken, and we will announce when we receive the whole thing, which probably will be in the next following weeks. At Proyecto Touro, there seems to be a long-term delays. Surely, the new environmental impact assessment has been completed but not filed yet. Well, that's over three years in the making to when this it's going to be filed in 2023. Other mining companies in Galicia have had their license approved since 2020. Yes, that's again also a fair point.
Other companies have got their permits, specifically, lots of quarries and one international one will be an open pit, mining tin and tantalum in the western southwest of Galicia. Yes, we are submitting the project in 2023. The reason of these delays have been to make sure we got the social license, which is something not written, but factual. 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 done wrong, that the water problems were not going to be fixed, that the water problems were going to affect the sea.
It has taken a long time to explain everybody in all the counties, municipalities downstream in the rivers, how there was no influence. Then the water treatment plant to have it up and running and to make sure that the rivers were clean to demonstrate that. Now I don't think there will be any excuse or any further delays from the Xunta de Galicia. We expect 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, it would be very difficult not to say no when you have a resource that you can mine.
Saying no to this project would mean that for the Xunta de Galicia to admit that they don't have technicians or in 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. I think this year will be the year. 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, they will still seem to be priced in Canadian dollars.
Was the move away from the TSX apart from extremely low volume of trading to allow Atalaya to move into the LSE, London Stock Exchange fully rather than AIM, and if so, when? We have been told 2021 that we would move, and we are moving present 2023. I have partially replied to this question before. There was no specific reason to go away from LS to TSX to go to London. It is more, more relation to saving costs, but also helps. The company, as I said, remains fully committed to move to the Main Market.
It has been going for some time, as I said before, the problem is, has been the tax issues that have arised and had, we had to change totally the way we are doing it, doing through another European location. Going through Cyprus listed wouldn't help. The electricity prices, the next question is, the electricity price looks to be almost back to normal. Do you see a risk that prices go up again in winter? Have you considered hedging more electricity so that they won't repeat the prices we saw in 2022? Yes, we continue to monitor the electricity prices. The futures now 10 years starting next year are around EUR 59, which is a decent price, but we believe that the long-term prices in Spain are going to be in the ranges of EUR 50.
If we see a bottom like we saw last year in February, we will probably take an opportunity there. 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. In theory, the most expensive times would be in the ranges of the 60-80. During daytimes due to the high solar influence and due to the wind, we will see much lower prices, sometimes even zero.
It looks like 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. We continue, by the way, to look at other possibilities of installing additional power like the wind. That's something that we have not closed yet to generate our own wind energy within our property, which will help us reduce Our, not only the 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 how Now that the electricity is much lower, why are cash costs not falling faster?
Are other costs still high? Which ones? Well, I have mentioned before that you can see in the presentation that the real costs have been reduced quite a lot, like EUR 0.50, EUR 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 is going down. Explosives is also linked with gas prices. Just to give you an idea, before the crisis, we were paying a price of around EUR 0.7, and that's euros, around that. When the crisis hit in the peak, we were paying EUR 1.40, so double. Now they are going to EUR 1. It's still 40% lower than the peak, but still higher than the EUR 0.7.
The tendency should be to go back to that level. As you may understand, when they put the prices up, they're very slow in putting them down. In diesel prices, it's linked to international market. The prices are going slower, down. 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. We are getting, for example, from Indonesia, our linings of the mills, and they have cheap electricity or cheap 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 in copper, and we have seen lots of M&A activity.
Should we be optimistic or cautious at this time? Well, this is an interesting 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. That shows you the difficult condition that we are in the market. I don't know the predictions of BHP, Glencore, Teck that we have seen recently. They are all showing at the end of this decade, which is only six years away, by the way. Six years is nothing. We are seeing deficits, people say EUR 6 million per year, EUR 4 million per year. Whatever is the case.
If it's 5 million per year, it's building five mines larger than the largest in the world in the next six years. It's simply not possible. It's simply not possible. The copper price in this five years will have to go up so much in order to remove consumption. 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. This move 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, it 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. I am very optimistic. We will not see very low copper prices in the future. Could we have an update of moving to the main board? The last update delays were blamed on Brexit, making things more complicated. Would you please make it more of a priority, put more resources in achieving the main board listing? Would you not agree that being a name is probably holding the share price stability? Yeah. I think I have spoken about this, it's 100% right. Some funds and institutions cannot buy a name.
We have had lots of meetings with potential investors that told us this, and we're working on this. Unfortunately, things are very slow, but as I said, this is high priority. What's holding here is the production of the competent person reports and all the documentation that's linked with this. Working fast and with several group of lawyers and advisors to have this as soon as possible. Which products fall within the main Riotinto operational for tax purposes and which will be taxed separately? I think all of them will be falling within a global company in Spain, Atalaya Riotinto Minera. We have several other companies which are operational companies for exploration and so on, but everything falls into the. The main taxes are coming all to Atalaya Riotinto.
Alberto, may I ask here, the way that it works in Spain is what we call the consolidated tax regime, which basically when some of the subsidiaries meet some of the conditions, which in our case, pretty much all the subsidiaries met that condition. We have presented the tax globally for the subsidiaries in Spain. Getting to the question specifically, the company which owned the Riotinto project, the processing plant, also Riotinto East deposit. We have other subsidiaries for Masa Valverde. That's why they all consolidated together, which basically have some benefit about netting off some of the profit when you have some losses on a specific entity. It's pretty neutral, and I think the Spanish tax office work quite well.
Thank you, César. The next question is the Astor file closed? Do we have an open appeal? Astor is still collecting some premium of our output of Riotinto. When will we remove Astor, and what do we date with the stop paying Astor? The file of Astor is now closed. They still get what they call the marketing agreement, where they have a small fee per ton of concentrate, which is fixed now. I believe this thing goes away in three years time, more or less. Between two and three 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 company is the third quarter of this year to connect it. With the power cost of license reduction in consumers, will the market expect updated cost guidance for this year? Likely, yes. I would say that when we announce 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 the one 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 solar and to the power agreement.
The solar represents around 22% of our needs, which basically will come at zero cost, almost. 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 at, let's say, around EUR 40. Because the cost of the solar is basically the capital costs, which is already in our balance sheet. Any update on European Spain position 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, not only us, by the Spanish Mining Association.
The European Union has approved copper as a part of the raw materials, which means it has what effect is that the states have to take all the steps to reduce the time required to permit and to construct things. 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.
And, uh-
Yeah, go ahead.
Yeah, sorry. And, just to add on the tax side, we are not aware about any tax implications of the copper being included in the strategic raw materials. We cannot respond that question. So far, we are not aware about any tax implication.
Okay. Can you expand on the chart showing the mining schedule? When do you expect the first ore from San Dionis open pit to the mill in 2024? How is this impacting head grades in 2024? Well, as I said before, in the plan, originally, we had in 2024 some lower grade in the pit. That's what's shown in the original graphs. The reality is that we will bring in some of this high grade in 2024. The grades, I expect them to be similar to what we have right now or slightly higher. When? I believe we will ready start moving some first strip in later this year, and probably move some high grade material in the early part of 2024.
Let's say first half to be a little bit conservative. Toto. There was a lot of strange objection against Atalaya EMED. Are the same people involved with Touro? Any legal activity against Touro? What action can be taken? Actually, the position initially of EMED was totally different. I was not aware of it. When I arrived here, we got the permits very fast. They're not the same people. There is a group of environmental group, very well-known environmental group, which is against us, but against, in general, every mine, all mining, and they are very active. They are very active, but their numbers are very small. Illegal activity. Well, I would say it's illegal, in general, to say lies.
Unfortunately, we have in Spain some laws that protect the opinion, and anyone can say whatever. For example, it would probably be a problem if I say that I'm going to kill someone, or I say that somebody's robbing, but they are free to say that we are going to be polluting the river and we are going to throw away our tails into the river, even if the project doesn't say that. What can we do? Not much from a legal action point of view because they are protected, but simply show it with facts. In the past, it was quite easy to get to go to Touro, take pictures from the streams.
They were in a reddish color, although they didn't represent any problem at all downstream because the river has trouts and very nice fishing, but it made a nice picture. One of the things we did is remove that picture. Now the rivers are clean. We have done it, and we have done it with the permits of the administration in a kind unique way because it's very. As I say, it's unheard of that somebody cleans something before getting the permits. That's what we are doing. That's the actions. Basically, slowly getting the support from everybody. Next question is, Sandfire purchased in 2021, Matsa. Copper was lower. Any read-through on our valuation? Same multiples could start result on what? Look, if we apply the multiples that were paid for MATSA, our market cap probably should be double.
The multiples are much better. I think Sandfire was a case where they had to do something because they were finishing their operations in Australia. They were running out of production, they had to do something, they paid a high price. We know very well the assets of MATSA because we were also bidding for those assets, our offer was substantially lower. Eventually, we had to continue with what we have. We think we have a nice future, I think it's a matter to demonstrate and show, as we did in 2021, the cash flow that can be generated and we get permits and we developed and we show total and the price will go up again.
Any overseas opportunities, acquisitions, any other regions in Europe? Size is important in mining. When do you personally hope to reach EUR 1 billion valuation? Last year, I thought we were going to go there. We have been looking at overseas opportunities, and in Europe, but especially in overseas. The problem with some of this are they don't make sense. They don't make sense in the sense that, yes, you grow for the sake of growing, but you're not adding value. By doing a merger, for example, and buying a company which is overvalued in Chile and doubling the shares, which is EUR 500, either in cash or in shares, then we will get to EUR 1 billion.
It would be the same thing if I ask an existing shareholder to sell half of his shares and buy half of the shares of the other in Chile, which are overvalued. I'm sure it would not be well-received. I wouldn't do it myself with my shares. Whatever we are doing, we're analyzing things and we get into process and look at things. We are doing it if it was our money. We believe we can get to EUR 1 billion ourselves, with what we have or with acquisition like we did with Toto, where the payments are all backdated, or like we did in Masa Valverde, or like we are doing exploration, or like we are doing with San Dionisio. With that, it's enough to get to the billion.
If we see an opportunity, and we are looking at several, that at least has the same discount of ours, so they are not overvalued, we will consider it, and we have been considering several. Because I agree with you, size is very important. Certain funds cannot invest unless you have a certain size. Well, that was the last question. I think they were very good questions today. Thank you very much to everybody.
Alberto, César. T hank you for that. I believe you have addressed those, all the questions from investors today. Of course, the company will review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Perhaps before redirecting investors to provide you with their feedback, which is particularly important to the company, Alberto, could I please ask you for a few closing comments?
Well, again, I thank everybody. I've seen some familiar names in the questions like I'm seeing the last one now. I thank everybody for the support. I mean, I really feel well with this company, with the support we are getting. Not only our employees, we have come a long way. Difficult situation. Share price a little bit weak due to the copper prices slowing down more than anything. Nothing going wrong. I think people still think that the electricity prices have not changed, which is logical. I don't know the prices in Australia, I don't know if they are high or low. I understand perfectly this happened. Eventually we will get there. I thank very much for your support. I hope we can continue to deliver with our promises.
Thanks a lot then.
Thank you.
Thank you.
Thank you, Alberto, César, for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected?