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LONDON (Alliance News) - Shares in copper miner Weatherly International PLC plunged Thursday after the firm put itself up for sale, among other funding options, as it seeks continue with the purchase of the Kitumba project in Zambia.
Weatherly's shares were trading at 0.24 pence each Thursday, down 59%. In February, they were at a 12 month peak of 3.20p.
On Tuesday, Weatherly had said its deal to buy Kitumba had lapsed after it was unable to agree a backstop date extension for the agreement.
Weatherly, whose Chief Executive Craig Thomas announced his departure earlier this month, agreed the deal in December with Intrepid Mines Ltd which would have seen it pay AUD4.8 million in cash on completion. In addition, there were deferred payments of AUD500,000 upon a "decision to mine" and a further AUD500,000 on the achievement of commercial production.
Earlier in April, Weatherly had sought to extend the backstop date to the end of April. The previous backstop date was at the end of March.
Weatherly said Thursday its backer Orion Mine Finance (Master) Fund I LP has agreed Weatherly can look for alternative financing for the Kitumba buy.
In early April Weatherly said it had rescheduled its debt repayments due to Orion.
The first repayment of facility B, previously due at March-end, was pushed back to June's end and is payable quarterly until the end of 2019, with a final payment due at the end of February 2020.
Repayment of capital and accrued interest of USD11.0 million under facilities C and D of the amended facility was deferred until June's end this year. Orion agreed, effective until then, to limit its acceleration and enforcement rights on the terms set out in the amended facility.
Weatherly confirmed Thursday it still remains unlikely to generate enough cash to meet all loan repayments especially in the near-term. The strategic review, which includes a possible sale, is part of talks with Orion over long-term debt restructuring.
Weatherly also gave an update on its Berg Aukas acquisition, saying it expects approvals for the deal from regulators to come by the June 22 deadline.
In early February, the firm agreed to increase its holding in Namibian firm China Africa Resources Ltd to 90% from 25% for USD600,000, purchasing the increased stake from Hong Kong East China Non-Ferrous Mineral Resources Co Ltd.
Berg Aukas is a historic mine located near Grootfontein in northern Namibia, which produced zinc, lead,and vanadium between 1958 and 1978.
Weatherly also said an updated pre-feasibility study for Berg Aukas has increased the overall project net present value to USD74.0 million post-tax and the post-tax internal rate of return to 35%.
This compares to the 2014 pre-feasibility by China Africa, showing a net present value of USD51.0 million and an internal rate of return of just over 31%.
Weatherly also said on Thursday that copper cathode production from its Tschudi mine in Namibia fell to 4,161 tonnes from 4,749 tonnes the prior quarter. Cash costs also increased, to USD5,608 per tonne from USD4,551, which it said was mainly due to a stronger Namibian dollar.
