Copper production in Q4 amounted to 13,885 tonnes, flat versus Q3 but down 3% year-on-year. The result was in line with estimates by BMO, Peel Hunt and Cannaccord Genuity, and 5% above estimates by Stifel.

AIM and TSX-listed Atalaya said the Q4 volumes exceeded expectations "due to better metallurgical recoveries which offset the slightly lower head grade".

The company said all in sustaining costs for 2021 were expected to come in at the lower end of guidance (US$2.50-2.65/lb) mainly because of the strength of the US dollar versus the euro and higher production over the course of the year, with total volumes of 56,139t representing an annual record for Atalaya.

Looking ahead, Atalaya said it expected annual production for 2022 to be between 54,000-56,000t - in line with city expectations.

However, analysts took particular note of the company's comments regarding energy costs, which have risen sharply in Spain due to the increase in European gas prices.

"Should the volatility and current energy prices persist for a sustained period, Atalaya expects that its operating budget and production guidance for 2022 may need to be revised," said the company.

Atalaya said it was "actively monitoring energy prices on a daily basis and is identifying potential measures that could be implemented in response".

"In the event that energy prices remain at elevated levels for a sustained period, possible measures could include temporary modifications to the mine plan, curtailment of throughput during periods of peak energy prices or reductions in discretionary expenditures," the company said.

Atalaya is expected to provide an update on its 2022 budget including cost guidance in its 2021 financial statements in March.

Shares in Atalaya were down 3% by 11am in London on Thursday, capitalising the company at £576 million.