Good afternoon, and welcome to the Atalaya Mining plc 2022 annual results 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 received during the meeting itself. However, 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 you over to CEO Alberto Lavandeira. Good afternoon, sir.
Good afternoon. Thanks everybody for taking the time to be with us. I'm going to go through the presentation, just reviewing the results of last year, especially the last quarter. It's been a quite challenging year, but we look forward to have a much better year this year. With me, while you read this forward-looking statements, I have César Sánchez that can probably answer some questions if they come in relation to numbers that are not shown in the presentation. I'll go directly to the presentation itself, trying to follow what we have been doing. If possible, and we have time, I will reply to, as usual, to any and all of the questions.
To summarize, I don't want to be reading the whole thing, but you have it, you have probably seen the presentation, but we produce around 52,000 tons of copper with cash costs all-in $3.37. Remember that we always post, we always post all-in costs to give a realistic view of the reality of the company. These costs were higher due to high inflation, as you all know, lower production during Q1 and higher electricity prices. Q4 was much better. Production itself was quite good all over the year, quite normal, except this small hiccup in the Q1, which was due to a strike in the Spanish transport system. Company, despite the challenges, generated an EBIT of EUR 55 million.
This is substantially lower than previous year, and a big amount of that was due to EUR 64 million extra costs of the electricity and of course, lower copper prices in relation to the previous year. We did invest in E-LIX. We started investing in E-LIX. We started investing in a solar plant, using loans from local banks. We ended up having a quite neat balance sheet with a net cash position of EUR 53 million for a second consecutive year. We were ready to pay. We paid a small dividend even with difficulties in September, and we plan to pay a small next small dividend also that has been decided by the board.
Well, it needs to be approved by the shareholders later this year. Liquidity has improved. The company is in much better position. We've completed the Astor integration, and we streamlined the shareholder register with additional shareholders, having only one large shareholder right now in our year register. It has been a quite good year overall. Besides that, we have been continuing to work with our expansion projects, our growth projects, both in under Riotinto in our satellites. Actually, we announced the results of the PEA, and I will speak about that later last month in the satellites around Riotinto.
Of course, we changed a little bit our board, which is now composed by only one shareholder representing a large shareholder, one board member, I mean. The rest, including me, are independent board members. Of course, I am part of the management, but other than that, I would say it's one of the most independent board that you can find in the industry. Looking at what we did the last quarter. Last quarter, finally, was a good quarter. Non-event production-wise. The plant treated the tons as is, as per design, which meant that we treated around 4 million tons during the quarter, which is equivalent to around 16 million tons per year, which is higher than the design rate of 15 million tons per year.
With good recoveries, 86.2, which is slightly lower than our previous year, but very well within the last few quarters. The only small weak point was the, as I said, the Q1 where we didn't produce as much as we wanted due to a strike in the Spanish system. Looking at the financials, sales were back to normal with more production and slightly better copper grades. Since the electricity prices went were better, not as bad as the previous 3 quarters. We generated a positive EBITDA back from a negative EBITDA position in the Q3.
Our net cash position remained strong besides the fact that we were investing in lots of initiatives such as the E-LIX and the solar plant and a few other things at Riotinto. The balance sheet, as I said, remained strong and I think the key point here to highlight is at the end of the year, we had a working capital of EUR 84 million, slightly lower than previous year. Still very strong. Very strong in spite of the high energy prices, higher production costs in general, higher inflation, and the investments that we have been doing, which accounted to around EUR 53 million during the year. Inflation was the key point this. I spoke about this several times. Inflation was the key point.
You can see that the key components of our costs, operating costs are explosives, diesel, tires, electricity, steel balls, and lime. Compared to what we had in 2020 and 2021, which is referenced with 100, you will see that explosives basically doubled the diesel, more than doubled the tires, 50% higher steel balls, 50% higher lime, almost double. Electricity, the last, the first part of the year, was multiplied basically by 4 and by 5. Anyway, the good news here is the future. The future is that electricity, we have seen electricity going down, as it's shown in the bottom part of the graph, steadily. The first January has been almost as normal as previous years.
We have also seen not really reflected yet, our decrease in steel balls and lime, in diesel and in explosives. Looks like this decrease is going to continue because the prices of explosives and lime are linked with the price of gas. The price of gas, I'm going to advance a little bit, speak about it a little bit later. Has been going down substantially. One of the things we have started to do this quarter, and we will continue doing so, is start to break down a little bit our operating cost of, to give more clarity to the market. You will see that we divide our operating costs in site operating costs and in off-site operating costs.
Site operating costs are normally linked to the cost per ton, I mean, the amount of material that you treat regardless of the grade. Off-site cost is basically what you have produced, the concentrates, what you have to send outside. Those are the prices there. The costs there are re-related to the prices of treatment charges, transport charges, freight. What you can observe from the graph that's shown is that actually the inflation was not that high in mining in spite of the doubling of the explosives and 50% higher in diesel. Where most of the increase came from, basically doubling our costs came from processing. This is due to the high price of lime and especially the price of electricity.
Other than that, other things like health, safety, insurance, manpower, et cetera, et cetera, you can see that really the changes from 21 to 22 are nil. Actually, only in the last part of the year of 22 was slightly higher. Basically, the cost of $0.54 per pound payable have remained the same. The same thing I would say with in general with the all-in sustaining cost when you start considering capitalized stripping, which has been quite constant, and sustaining capital, which has been quite constant during the year. Normally, it relates to, of course, ongoing CapEx that we require at the plant, but also basically the maintenance of the tailings facility.
As I said before, the key component of the cost here has been electricity, and it's important that we explain how it was, how it has been historically, and how it looks like it's going to be. In the upper part of the slide that you have in the screen, you will see the, some green columns which show the, what was the electricity market in Spain in the last few years. You will see in the left part that has been stable around EUR 50 to 70 per megawatt hour. It's EUR 0.05 to 0.07 per kilowatt hour. In 2021 we had a crisis. Started with the city crisis, but we had a fixed price coming from 2020, so we didn't have any, an issue.
In 2022 we were exposed to the market and that's shows that we went from electrical price of around $0.06 per pound, which is EUR 60, to very high numbers. Very high numbers that are shown in the lower part of the graphs where you will see that our electricity prices have been all around EUR 250 to 300 per megawatt hour. That means 5 times higher than it used to be. Okay. That's thanks to, thanks God, situation in Q4 was a little bit better, as you can see in the lower graph. In January and February, and so far in March, slightly better even than in Q4.
Still not high, not as low as it used to be, but I would say much better due to the high intensity of the wind, solar, and in some cases, hydraulic. The most important thing here is that, as you some of you know, we signed a long-term agreement for 10 years that kicked off in 2023 in January, at a long-term price of around EUR 54 per megawatt hour, flat for around one-third of our consumption. This has an incredible effect of lowering our future electrical costs. Together with a solar plant that will kick in next year, basically we'll have covered about half of our electricity costs. What about the other half?
Well, the other half is related to the price of gas. Spain is has a distribution of electricity with a mix of nuclear, hydraulic, water, but the marginal cost producer is the gas system, the combined cycles. The price of electricity is normally like 2 times multiplied by the price of gas, plus some CO2 adjustment. One of the things you can see in this graph shown in the screen right now, is that the price of gas that we are enjoying now around a little bit less than EUR 50 megawatt hour, is roughly the same price that we had in summer last year. Sorry, in summer 2021.
Which is almost 6 times less than what we had in the peak of August 2022. If you remember what happened in August, is that there was the war of Ukraine, the blowing of the pipes coming from Russia and the Baltic, plus the extraordinary heat wave all over Europe, and specifically in Spain, that pushed the prices of gas quite a lot. Two things are different this year. First is that we have this of this power purchase agreements and some fixed rates, so we will not be so much affected to the changes. Second is that Europe is prepared with LNG. Spain consumes LNG, and it looks like this year the, those big spikes are not going to happen this year so far.
Going to what happened in last year and why it's not going to be repeated, you can see in the upper part of the graph that about the increase in prices of electricity created a huge increase of almost 250% on the cost of electricity. It went from having less than 0.2 $ per pound cost of electricity to going to almost $1 per pound. What's the future? That's past. The future is that in the lower graph, you will see that in orange will be the average price that we will be getting with our PPA and our solar compared to the price of electricity in the market. What does it mean?
If we didn't have this agreement, we would be having at, let's say, EUR 150 per megawatt hour, we'll be having $0.5 per pound copper. The reality is we'll have a little bit about half of that. In summary, I think we are quite well prepared for this year and especially for future years. What are we looking for 2023? We hope to have a year of production similar to previous years, without this total we had in March. Cash costs and all-in costs, we have guided between $3 and $3.20, which is slightly lower than previous year, but higher than the other years. The only reason here is that we don't know what's the electricity price going to be.
We have assumed I would say higher prices, but lower than previous years. We will be spending around EUR 10 million in exploration. If needed, this is something that we can always reduce if needed. We will be treating around 15.5 million tons of ore through the plant with a recovery we expect in range of 84 to 86%. Basically, we expect it to be an on-demand year. Several important initiatives that we have to do this year is finally construct this 50-megawatt solar plant. Which we will start seeing activities in the ground in April and should be ready by the end of the year. We have had some delays with civils, with supply of materials, but finally things are moving.
We are also moving, as you can see in the slides, in the screen now, with the construction of the E-LIX installation, which is progressing well, and we believe that we will be able to start commissioning, at least partially by mid-year. Again, this installation has suffered some setbacks, some delays due to the supply chain and due to being something that's quite new and engineering, you know, and these things is never something off the shelf. We will continue exploring in Masa Valverde, in Ossa Morena, which is just north of Riotinto, and Riotinto East. We have a budget of EUR 10 million, which is a significant budget for a company of our size.
Right now, as we speak, we have 3 rigs going on in the area around Masa Valverde, 1 rig in the area of Ossa Morena, and we are waiting to start drilling just after Easter in Riotinto East with a new rig, just testing some anomalies. It's going to be a quite a busy year. I would say that the most important development this quarter has been the growth plan of this company. This company is not only Riotinto. We have been working now for 8 years at Riotinto, but we have a huge exploration ground just around Riotinto and also in the north called Ossa Morena and in Toro, in Galicia, in the north, all copper.
Looking at Riotinto, we believe we have quite a different advantage, I would say, compared to others, other new projects. You all know that the new copper is needed. New copper is needed in the world. One of the things that we have versus other projects is that we have this huge infrastructure advantage. Most of these projects that are going to be needed for the decarbonization of the world will require labor camps, fly in, fly out, desalination, water pipelines, smelters. We have our own smelter, we have ports, we have transmission lines. We don't need camps because we have villages around our installations. This is an incredibly huge advantage. What we plan to do with this installation.
We were doing the same business model that MATSA is doing, and it's quite common in other places, in other districts, where we do have a centralized installation where we have our plant and where we track the ore from the existing deposits to the single plant. This is what MATSA is doing with three deposits underground feeding a single plant. In yellow, you will see the volcanic rocks that form the VMS systems at the Pyrite Belt. Further to the west, you have the Neves-Corvo and Almina mine, and then in the page, we have other mines like Las Cruces, Tharsis, Valverde. All these dots are known sulfide deposits. Very prolific area. Looking at what we have specifically is you will see in the background of the picture a big pit.
That pit shown in white and black is the existing current pit. With that one, we would have a life of around 10 years. We said, well, we have all the resources drilled. It's called San Antonio underground, high grade, just continuing in the far end of the picture, which is east. In the front part of the picture, which is west, we have the San Dionisio, which is the remnant of an old deposit that was mined in the past by Rio Tinto, where mining started over 150 years ago. At the left, we have the plant with a huge capacity. We decided to put a plant together.
We had announced already the these resources with the NI 43-101, but we decided to put a plant together where we could mine three of these deposits simultaneously and see how we can benefit out of this. We ask our company, Tetra Tech, to put a picture together, which if you look at the slide, is shown in light green is basically the current pit, and shown in dark colors and in gray would be the additional other deposits. As you can see in the bottom part of the slide, the first four years, we only mine copper only. Very simple. Starting in 2027, it's the fifth column in the lower part of the graph, we start adding zinc also.
Which means that we'll have to, by that time in 2026, we'll have to have a zinc circuit or something to treat that zinc, which is higher grade. Well, with that plan, our equivalent production profile will be around the 55,000 to 60,000 tons of copper in the next four years. This is an external plan. Of course, we will try to put this normalized so that in 2024 you don't see a slight reduction, so have it very normal. In 2027, as soon as we start getting on the zinc, we start seeing higher production profiles, which takes us well over 100,000 tons of copper equivalent. These numbers give exceptional high returns.
The simple reason of this is that we have a plant already, and so our investments are minimal. If we use the current copper price, which is around $4 per pound, the cash flows undiscounted after tax will be around $3 billion. Remember, our market cap right now is around not even $600 million. Discounted at 8%, which is a kind of a standard, we will get our net present value discounted at $1.5 billion. Again, about 3 times our current market cap. I would like to highlight that this does not include any addition of the satellites of Valverde or Rio Tinto East or Toro.
It means assuming that we didn't find any single ton in the whole next 15 years, this would be our model of our production profile and cash flow generation after tax. Very significant and comparable with this large portfolio deposits around the world. This comes with some CapEx, which we highlight in lots of detail, which is really back-ended. Most of this CapEx comes from the development of the underground deposits and also from adding a plant expansion or a second line in 3 years' time. Other than that, is basically more space for tailings, which is something that we'll do anyway. Of course, these numbers of CapEx are included in the. They will be financed from the cash flow, and they are included in the numbers I just mentioned before.
This will also come with two consequences of reduction of costs. Since you start putting in higher grade material, their costs are reduced. The cash costs will go down substantially around $0.80 once we get into this polymetallic area. Which means two things. One is higher production and lower operating costs, which means higher cash flow. A very promising PEA, which even at $3.50 per pound copper as seen in the screen, it still has a net present value of $1.3 billion, discounted at 8% after tax, including without discounting over $2 billion cash flows.
Of course, using at $4 per pound, these numbers increase at the to the prices, to the numbers I gave before. We have to say that, of course, we believe in the next 15 years, we will have years where we will see much higher copper prices than $4 because the industry and the whole demand of copper requires this higher metal prices. Very encouraging future. At Toro, not much to say than we continue to permit and to progress this the permitting of this installation. For those of you who are new, this is a brownfield project that has a current quarry on site, where we had already a negative environmental impact declaration.
The this negative environmental impact permit three years ago was not due to any environmental grounds that the project has. It was due to the former legacy water issues of the project. This project had a stop in 87, back in 87, 88. One of the things we agreed with the government of Galicia was to install a water treatment plant that you can see in the pictures, where water comes in brown with some acid formation with iron and comes out clean in the bottom part. As a result of that, now the rivers are clean, nobody can accuse us of not being able to fix the installation, to fix this current situation.
We have had lots of visitors and people demonstration, demonstrating that they want the mine, training courses for operators being publicized in newspapers. We believe we are in the right track and permitting takes time, but we believe it's right now is the moment. With all this, where do we see Atalaya? Well, if we were to stay as we are, we will be in the range of 55,000 tons of copper, which is, by the way, is 4 times more than we had, 3 times more than we have when we started. We will be adding over to 90,000 tons of copper. That's only copper. With the PEA numbers that we just mentioned before, that's without zinc.
When we add Toro, we will be well over 120,000 tons of copper, which is a very significant growth for a company of our size. This can happen in as soon as 3 years from now if we get the permits of Toro this year. In summary, lots of things going on. Very busy as we, as usual. Solar plant going on, E-LIX going on, San Dionisio will be doing lots of work after the PEA. Toro, we continue permitting. Masa Valverde is still early days exploration, but we continue with the permitting, and we believe we are going to be getting the permits to mine very soon. O Sabarín is a whole new ground where we will be early exploration at this stage, although we already have some resources.
I think, that's the summary, and I would like to leave about a half an hour for questions, and we have lots of questions, so.
Alberto, thank you very much indeed for your presentation this afternoon. 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, César, as you can see, we have received a number of questions throughout today's presentation. Thank you to all investors for submitting their questions. Alberto, if I may hand back to you for the Q&A and 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. Thank you.
Okay. Excellent. Yes. I have lots of questions that we have received, sent by email or before presentation. Let me read all of them and try to respond to all of them. Some of them are kind of repeated, no problem. First one: In terms of total, how have your discussions with authorities progressed during 2023? I suppose it's also 2022. This is still new news, but how do you think copper being declared a strategic commodity in Europe can assist, if at all, given the key impediment of the project is on environmental grounds? Interesting couple of questions here. First of all, let me start by the end. The project never had a problem with the environment.
Actually, this is a brownfield area with lots of eucalyptus, where a quarry is still active and is ongoing. There is an open pit there. The problems to give us a negative permit, three years ago was not, was not based on special flower, a special affection to the environment or whatever. It was due to two things. It was more political than anything. It was the noise created by anti-mining groups when the tailings of the Brumadinho dam in Brazil broke, and they created a wave of mud flowing down and killing lots of people.
Second is the fact that there were acid waters from the legacy mine, and they were saying, "If this is what people did in the past, you're going to do the same but much larger." To address both, we said two things. Okay, the thing of the past was due that they didn't use plastic lining and didn't do the right things, and we addressed those with using a water treatment plant. The issue with the tailings itself, we have presented a project which is basically without any water on top of the tailings. If there's no water, it cannot be this break. Besides the fact that the tailings itself is designed in a different way.
Our discussions have been continuous with the government, the regional government and all the authorities, to get the water permits, to make sure that the project we were presenting was correct. All of this has been done in hand. Another thing they recommend us to do is to fix the social license because due to the lies that were transmitted by the anti-mining groups, the population was believing we were going to be creating a moon's landscape and throwing everything to the river, which I don't know why we would do it. We have done that with signing lots of agreements with stakeholders, regional stakeholders, fishermen, river, et cetera, et cetera. All of them has been lots of work in the background.
We believe we're in the right path or so it looks like from all the feedback we are getting. Excuse me, sir. It was a little bit long, but I think it's very important. What are the next steps now that you have completed the PEA? Will you start feasibility study and any permits required? Well, lots of work ahead of the PEA. The PEA is basically a guideline. It's a route. We will be doing more of a feasibility study itself, basically doing detailed engineering for the plant design. All those numbers that were part of the PEA have a backing that is realistic, instead of a more general review. We will be doing detailed designs of the sink circuit and then few other.
Detailed mine planning of the underground mine. The open pit is quite clear. Permits, we will require is additional space for tailings and disturbance of land, which we believe, we will get very soon because we have started with this well ahead of all this. In Spain, once you have that and once you have certain disturbance of land, and then the changes within, let's say, within the broader permit are considered non-material and are dealt with in a year-by-year basis. The permits required to start mining in Santanica, for example, very likely we will get them later this year or even in the Q1. No, later in the year. The tailings for additional space and tailings, probably in April or very soon. Very soon.
Next question is: With the solar plant and potential wind turbines, would Atalaya get into the power business life of the mine? Has any more work, future planning been done on this feasibility study plant? Well, not really in the power business. This is for self-consumption that has certain advantages. Our goal is to get to around 50% of our self-consumption, which has the advantage of not having to pay the taxes and the connection to the grid. It's more economic than selling the electricity. Obviously, if you have a consumption like we do have.
We have been doing lots of work and the feasibility study of this, of the wind is about to be completed after having 6 months of continuous measurements with a big tower and also 20 years of data from ground-level measurements. So far, the preliminary numbers show that the wind, 4 wind turbines of around 5 megawatts each, would provide us with around 15% of our needs according to the prevailing winds. And the price that we can get there based on the capital costs is very competitive, better than connecting with the grid, even with the long-term prices that are seen in Spain, around EUR 40 to 50. We would get better prices than connecting with the grid at EUR 40 to 50.
Our plan is to probably get this final study to the board in the next meeting. The next question is on the PEA. The net present values look too high compared to our market value. Will values decrease once the feasibility study is finished? No, that's the reality. That's the numbers. Normally, companies trade at around 0.7% of the net asset value, 0.6%. We believe we are trading at 0.3% or 0.20%, which is a fact. I think it's a matter of catching up when people start seeing that we continue to deliver like we have done in the past. The feasibility studies or the numbers will just optimize the current plans.
I hope that the studies show that's better, actually better than the PEA by advancing the production of higher grades and reducing the capital costs. By the way, we have not assumed the use of E-LIX in this, in this system, which could provide an additional advantage. We have been very conservative in the PEA by assuming differential flotation, which is something that we know it works. ESG, do you know where Atalaya scores relative to peers? I don't have the data here, in front of me, but maybe César, do you have the numbers?
Yes. Yes, we do know how are we doing with regards into peers. According to Sustainalytics, which basically issue a report on Atalaya, not a long time ago, it was in February 2023, we are very close to Camel and better than companies like Jerpoint Global or Solid Gold. But I think the important here is not where we are now, where are we getting to. I think there is a significant improvement. Taking, again, Sustainalytics previous report, that they rated us at 58.8, and we are now in the range of 39.2, which is a significant improvement from the last, from the previous report.
I think that we recently report the so approved the sustainability report for 2022, which means a significant improvement on the quality and the disclosure that we do on all ESG matters. I think that will give a significant improvement to our rating. We continue having these discussions with the two major rating agency like MSCI and Sustainalytics, and I think that will get to a better rating, which will again compare to better companies that are doing better disclosure on sustainability.
The next question is also related to ESG, maybe you can also answer, César, I'm going to read it. Carbon footprint, carbon credits. With solar coming online, would this generate carbon credits, potential resource revenue?
Well, we as a company, we don't have many carbon emissions to the air. We don't have as an industry other than the vehicle that operate in our mine. With that in mind, we are not really into the credit or market at this time. I mean, we will look any other revenues alternative, but I can see that as Alberto mentioned, when we have the solar plant, which is significant big, that we will be using the full capacity of the plant to be used in our plant. I'm not expecting to have any sort of accident on that on the capacity of the plant. Yes, this is something that we will look at it.
We haven't looked at it so far, but I'm not expecting a significant amount of revenue there if it's something.
Thank you, César. Next question is regarding acquisitions. Last time you mentioned prices, you mentioned prices were too expensive, it made no sense. Anything changed? Well, we continue to look at things, it's too early to say. We continue to look at several opportunities, but, not much to comment here. If we do anything, it will be that it makes sense and it can create value, because we have enough in our plate to grow without needing to acquire. Of course, we are quite opportunistic in this sense. Next question is, are you still planning to move into the, to London, to the main market? Yes, although we have come with some difficulties due to Brexit, which, maybe, César, if you want, you can give some small summary.
I mean, yeah, we continue to look to find ways to get to the Main Market.
Indeed. The goal, the main goal for Atalaya is being listed in the premium market of the London Stock Exchange, and we're getting ready to get there. We plan to do it 2 different step. So step 1 would be to move the company from Cyprus to the U.K., and then step 2, once we are in the U.K., going to the premium listed, which obviously will have the possibility of being eligible when we have the size to be in the index on the FTSE index. We found in this first step, moving from Cyprus to the U.K., some tax issues, mainly driven as a result of the U.K. not being in the European Union anymore. This is something that is slightly changing the plan.
The plan in order to get to the same goal, which is going to the premium listing. Some of the work or many of the work that we've been doing for the last year or year and a half will continue to be in order to get to the listed main board. This is something, all the improvement that we have done on the corporate governance with the sustainability committee and now we're now looking at the UK Takeover Code and also looking, keeping an eye on the UK Corporate Governance Code just to ensure that we'll fulfill all the requirements to go to the main market. This is something that is in our plan, we get there.
We just need to slightly change the plan as a result that we're now moving to the UK. Yeah, still, as a main goal of the company.
Thank you, César. Another question is, do you have any contingency plans if the banking crisis continues to grow? Well, first, I expect it not to grow much. Second is I think the banking crisis is probably, unless it goes global, I'm not so sure if it will affect the copper demand. The copper demand now is linked to real demand from especially CO2 fights electrification globally, not only in China, but worldwide. For example, I read this morning that China had installed, in China this year, electrical panels, solar panels, equivalent to the rest of the world. They're still. It's growing big time.
The bank crisis of 2008, which is the one that was probably the deepest part, it also affect the copper. If you remember, 2009 was extreme in rebound. Actually, prices peaked in 2009 and 2010. If it happens this year, I think that will happen. It will be the same result. The demand is there and there's no supply. The way we prepare with this is stick with our long-term plan, be tight with our expenditures, and obviously, if there was a huge decline in copper prices, we'll probably have to slow down in contingent expenditures like exploration and maybe a few others, but not much. We're a very slim company.
Another question is, can the solar plant be expanded beyond 50 MW, and what's the update on wind turbines? You just mentioned the update of wind turbines, finalizing the final economic studies. We already have data. The solar plant cannot be expanded beyond 50 without making lots of modifications, and also because you are not allowed to sell to the grid, and what we can absorb is 50 MW. I think this is our limit at this stage. It doesn't mean that the long term, we cannot use our existing land to install a much larger solar plant, I mean, a huge solar plant, which actually we are looking at, but that's a different story. It would be for as a business itself. Next question also related to power is: Power prices seem to much better in Europe now.
Will you consider hedging more power in another long-term contract? Yes, we would. We continue to watch the long-term prices. Right now, they're around 60 EUR megawatt hour. We sign for lower than that. If we can see the opportunity, we will probably do it in a certain part of our costs, because we believe although the long-term views of prices in Spain, everybody talks about 40s to 50s, at the end, we wouldn't care paying the high 50s if it was needed, because it doesn't mean too much of a difference. So far, the prices have not gone there yet. Another question is: Which exploration project has the most potential, Ossa Morena or Masa Valverde? Difficult to say. Difficult to say.
Ossa Morena is I would say more greenfield, very clean copper with gold, huge belt, but early days. You have to be careful because and slowly because it's basically discovery mode. I think the potential is very high, but it's longer term. Masa Valverde, it's an existing deposit where we are basically highlighting the high grades of these existing deposits. Around this Masa Valverde itself, we are finding several satellites, which we are drilling. I would say shorter term is Masa Valverde, longer term, Ossa Morena. Another question is your recent work on ESG, have you started to see any positive feedback from investor community analysts, given investment community? Given investment community supposedly track companies which score highly. If not, will you make sure necessary tracking agencies are updated?
Well, I think this has been explained by César. Yes, we get in contact with the tracking agencies. We are doing much more than even people see. Very soon, I mean, in weeks, we will be publishing then our next ESG report, which is even better than the previous one. Yes, we are receiving quite good feedback from investor community because they see we are actually in the front of what's being done by companies and mining companies specifically. Another question is: Do you have a target date to be quoted in the main market? Is the market cap large enough? Maybe if, César, you can speak. I mean, I'll repeat the question. Do you have a target date to be quoted in the main market, and is the market cap large enough?
By the way, I can send you the telephone of César, and you can speak with him directly. Please, César.
The target that we have in terms of timing was, as you might know already, was early 2023. As a result of the issue, what we found on the moving the company to the UK, it's been a little bit delayed. We continue having the idea of making that movement in 2023. We obviously don't know what the step that we will be founding, you know, going to the Main Market. I think the discussion with the bank is, we can terminate the perspective. We pretty much get in already for before we go to do the perspectives, and the perspective might take between 3 to 6 months.
I think this is something that is doable still in 2023, but we just need to ensure that we have the good base and the company is domiciliated in the country that we need to be in order to be to the premium, in the premium listing. You're also asking about the market cap. I think the company, the answer is yes. We have the, you know, a good size to go to the main market premium listed. We might not be big enough to go to one of the indexes. We might not get to FTSE 350, for example.
I think the last time that saw, I've seen the cap was around GBP 850 million, so we are in the range of GBP 500 million. So we can be in the main market premium listed, but we might not be eligible to be in the FT index yet as a result of the market cap. I think that's a good progression. It's just waiting, being in the premium listing, waiting to get the right size to get to the index.
Okay. The next question is: Is there any further liability to Astor? If so, how is this case proceeding since the last update, please? No, there's no further liability with Astor. The only thing we have done, and this I don't think we have even announced it, is to have an appeal to see if we can recover the cost, because we believe the result of the last trial was not fair, and we were asked to pay interest well before they were due. We have asked the court in an appeal to see if this cost could be reviewed, and that's it. No liability from our side. If anything, it will only be positive.
The next question is, well, Can I check if the solar plant is in your cost guidance for 23? Yes, it's, the capital cost is included. The operating cost, for conservative reasons, I don't think we have put any savings in our cost guidance because it will start in the last part of the Q4, normally is wintertime. We believe it's, for conservative reasons, we believe it's not going to be making any contribution this year. The next question is: What % of our copper output can E-LIX be, well, plant treat? Well, depends on the grade that we put in. Normally, we will start with zinc and copper.
If we start with zinc and copper, which we will be extracting the zinc and maintaining the copper in the concentrate. Only the plant that we have right now could treat easily our half of our concentrates or more, with the current grade that we have. The bottleneck is the higher content of metal that you have. If we assume we have around 4% or 5% of the, of zinc in it, we could treat about half of it.
The main target for E-LIX is to prove in industrial base, and then we'll just repeat in lines and be able to treat complicated concentrates that are having copper and zinc, which would give us around 15 to 20 points higher recovery, especially in the polymetallic materials, namely San Dionisio, San Antonio, and Masa Valverde. Let me see. Another one is: Please, Juan, on cash costs, taking into account electricity $100 to 150 PPA, $0.54 to reach C1 to $0.83, we will be looking at very high inflation still for the remaining costs, right? Well, I think, I'm not sure if that's the case. I mean.
No. No.
But, but probably-
I think the issue is mainly on the effects, which have a massive impact. Just bear in mind that almost 95% of our cost base is euro-denominated. The issue with the effects when reporting cash costs is just a reporting issue. The reality is when we budget 2023, we use the forward cure, which at the time that we approved the budget was 1.10 US dollar per euro. The effects rate that we have in 2022 was much lower than that. If you take that into consideration, you know our cost, you have that significant gap between what we should be looking at, what we should have if you compare to the previous year.
To get into the inflation, other than electricity and diesel, which I know we just made some estimations on 2023, the remaining cost of the input, to the contrary, we are expecting to either stay where they are now or even reduce a bit in 2023. We're not assuming any sort of inflation, significant inflation in any other item other than electricity and diesel.
The question is actually the same, along the same lines, and makes a very good point, I have to say. We achieved $2.70 cash costs in Q4. Can you explain the bridge to $2.83 in cash costs guidance in 2023? Given that you should be achieving some tailwinds on your energy prices, and hence, you would have perhaps expected lower cash cost for 2023. I think it has been explained in the sense of exchange rate. It's I suppose that's the main reason. Otherwise, the point is very good. César?
Yeah.
It's the same thing.
Yeah. Yes, it's comparing 2022 with previous year. I think that we sort of have in 2022, some sort of inflation, where for 2023, as I say, we're not assuming any additional inflation. We're also assuming that the inflation that we experienced in 2022 is not gonna come back. Salaries increased by 5% as of an average. That salary, that 5% will stay in 2023. It won't increase. Obviously not gonna come down to you know, to 5%. Yeah. This is mainly that the inflation that we experienced in 2022 will remain in 2023, again, other than electricity and diesel.
The last question is: How much of your energy requirements are now locked in a fixed price for 2023 and 2024? What price have you locked in? Well, we have actually locked in from 2023 onwards for 10 years, so 2023 to 2032, around 30% of our current needs. I think it's a fixed bottom, and the price we have locked in is EUR 54 MWh. Of course, on top of that, you have to add some taxes and some connections to the grid and so on. Basically, comparing peers with peers with the plain consumption prices. In addition to that, starting, as I said before, in 2024, we will have our solar plant kicking in.
Based on the number of hours that we receive in this region, this solar plant will give us around 22% of our needs starting in 2024. Of course, the price that you have is basically zero. It's your operating cost because we already have, in the budget, in our balance sheet, the investment. If we took this solar plant and, let's say, sold it to an energy supplier and they charge us a price for that, we will be probably getting around EUR 25 to 30 megawatt-hour for this 20%. If you made an average between the EUR 54 and this, let's say, EUR 25, we'll be getting around EUR 40 megawatt-hour for forever, for around 50% of our needs. Just to
Also, if we got the wind, it would probably be able to add another 15% of our needs based on 4 towers. We could probably go for more, but the study we're doing is more a kind of prudent investment, and something that we can afford. I think that's all. I don't think I have any more questions, and I think we have replied to each and all of them.
Yes, that's great. Alberto, César, thank you for that. I believe you have addressed all the questions that came in from investors today. Of course, the company will review all questions submitted today, and we will publish those responses on the Investor Meet Company platform. Perhaps before redirecting investors to provide, you with their feedback, which one is particularly important to you and the company, Alberto, could I please ask you for a few closing comments, please? Thank you.
No, I think thank you very much. Thank you very much for being here. I think the future of the company is great. We have had a difficult year, but we are very well positioned for the future. I just remind people that this company was supposed to be 12 years mining back in 2014. We have been already 8 years, and we see ahead of us another 15, without even considering the new projects in total, in Paso Verde and any other discovery. I could see this company well over 20 years life, which is quite a lot considering where we came from. I think the future is great, and thanks a lot for your continued support, which is always helps us to keep pushing and working hard. Thanks a lot.
Alberto, that's great, and César as well. Thank you once again for updating investors today. Could I please ask investors now to close this session, as you will now be automatically redirected to provide your feedback and although the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Atalaya Mining plc, we would like to thank you for attending today's presentation. That concludes today's session. Good afternoon to you all.
Thank you.