TIDMWTI
RNS Number : 5315V
Weatherly International PLC
15 January 2013
Weatherly International Plc
Quarterly Operations and Production Update
Weatherly International Plc ("Weatherly" or "the Company") is
pleased to present its quarterly update for the second quarter of
its 2012/13 fiscal year.
Highlights
-- Bankable Feasibility Study ("BFS") for the Tschudi Copper Project completed.
-- $88m project financing term sheet signed with RK Capital
covering 100% debt funding of project.
-- Tschudi financing due diligence underway.
-- Preliminary work on the expansion of Central Operations into Old Matchless started.
-- Second quarter production from Central Operations was 5,780
tonnes of copper concentrate containing 1,328 tonnes of copper
metal, produced at a higher than budgeted head grade and
recovery.
Rod Webster CEO of Weatherly commented:
"Weatherly is moving into a significant period in the Company's
life. The progression of the Tschudi Project is set to transform
the Company from a junior to a mid-sized copper producer.
2012 was a very successful year for Weatherly. Not only did we
announce a substantial profit for the fiscal year ended in June
2012, but most importantly we completed the BFS for Tschudi which
will put us onto a growth trajectory over the coming years.
The Central Operations continue to serve their original
strategic purpose of providing Weatherly with a platform to
generate cashflow, enabling us to pull together a strong operating
base and establish a team of people capable of driving the business
through its next stage of growth. Old Matchless offers us an
additional opportunity to reduce our unit costs and give our
operating revenues a significant boost through increased copper
production. We are looking forward to driving the business through
an exciting period in 2013."
Tschudi Copper Project
The Company completed the BFS for the Tschudi Copper Project.
The study evaluated an open-pit, heap leach, solvent extraction,
electro-winning project capable of producing 17,000tpa of copper
with an 11 year mine life.
The key elements of the BFS are:
Production
Mine type Open pit
Resources 50.1mt at 0.86% Cu
Reserve 22.7mt at 0.95% Cu
Mining rate 17mt/yr
Mine life 11 years
Stripping ratio 7.45/1
Processing method Solvent Extraction, Electro-Winning
(SX-EW)
Processing rate 2.0-2.6mt/yr ore
Recovered copper 184,275t
Annual production 17,000t/yr
Financial
Initial capital $N693m (US$81m)
Life of mine capital $N941m (US$109m)
Life of min cash cost (C1) US$4,267/t Cu (US$1.94/lb)
After tax NPV (8%) - Consensus Case(1) $N915m (US$105m)
After tax IRR - Consensus Case(1) 32.1%
Payback from start of production 2.43 yrs
After tax NPV (8%) - Alternative Case(2) $N2,055m (US$238m)
After Tax IRR - Alternative Case(2) 50.8%
Payback from start of production 1.98 yrs
(1) Consensus Case - uses industry consensus forecasts for
exchange rates and copper price.
(2) Alternative Case - uses exchange rates and copper price as
at December 2012.
Subsequent to the completion of the BFS the Company has signed a
term sheet for an US$88m project financing facility with RK
Capital. The financing agreement is subject to due diligence, which
commenced this month.
Reopening Old Matchless
During the quarter the Weatherly Board approved a work program
for the development of the Old Matchless Mine, which will
effectively double the production of an asset with an already sound
operating base. It will also enable the company to make increased
use of the underutilised Otjihase concentrator and reduce the per
unit cash cost of production at Central Operations.
Production
Production results for the quarter are set out in the table
below.
Quarter Quarter Quarter
Quarter to to 30 Jun to 30 Sep to 31 Dec
31 Mar 2012 2012 2012 2012
Ore Treated (t) 82,558 85,153 87,645 79,330
Grade (%) 1.58 1.66 1.8 1.81
Recovery (%) 92.98 91.52 93.31 92.58
Copper concentrate
(t) 5,148 5,605 6,499 5,780
Copper contained
(t) 1,214 1,292 1,470 1,328
Central Operations
Quarterly production from Central Operations was 5,780 tonnes of
copper concentrate containing 1,328 tonnes of copper. Production
was adversely affected by poor mechanical availability and the
shorter working month in December. Mined grades and metal recovery
remained strong with cash costs largely unchanged from the previous
quarter at US$5,829/t copper.
Commercial
During the quarter, the Company delivered 1,341 tonnes of copper
contained in 5,840 tonnes of concentrate to metal trader Louis
Dreyfus at a weighted average price of US$ 8,438 /t copper. The
Company continues to maintain its policy of forward selling a
portion of its production up to 18 months ahead.
As at 31 December 2012, the Company had:
(1) cash at bank of US$3.5m equivalent*
(2) reduced its loan with Louis Dreyfus to US$4.4m, having made
loan repayments of US$0.4m in the quarter
(3) forward contracts over 3,600 tonnes copper at an average price of US$7,877 /t
The Company's next quarterly operations and production update
will be on 16(th) April 2013.
* not directly comparable with previous quarters as creditors
were paid early for Christmas and sales normally received during
the month moved to January.
About Weatherly
Weatherly is an AIM listed, copper focused mining company, the
principal assets of which are located in Namibia. It currently has
two producing copper mines (Otjihase and Matchless), and has
recently completed a bankable feasibility study for the Tschudi
Copper Project. These assets will enable Weatherly to achieve its
medium term strategy of establishing a copper mining business
capable of sustaining approximately 20,000tpa of copper at industry
average costs of production.
The Company also has a 25% stake in an AIM listed company, China
Africa Resources Plc (CAF), which is currently focused on the
development of a lead/zinc project at Berg Aukas in Northern
Namibia.
For further information please contact:
Weatherly International Plc +44 (0) 20 7917 2989
Rod Webster, Chief Executive Officer
Dean Friday, Investor Relations
Canaccord Genuity Limited +44 (0) 20 7523 8000
Andrew Chubb, Sebastian Jones
This information is provided by RNS
The company news service from the London Stock Exchange
END
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