Member Info for JP2000

garyn: the repayments issue is that 3 payments are due at once which is quite a bite. They are generating cash and could afford at least one payment but I understood once WTI made the first payment then there are no further changes allowed so its sink or swim which is why they've never made a payment.

Additionally: There's a problem with recovery rates and leach times due to the ore type at lower levels. WTI have said no conclusions will be available until July but the did take a write down. The plan is to use forced aeration and microbes but we don't currently know the recovery rates. Tschudi could still be fully developed, just depends on Cu price. The resource is open at depth although water ingress and stripping make this expensive to mine. The debt liability of the PLC is a major obstacle to developing the other assets but realistically developing is the only way to realise value. CAPEX Berg Aukas $54m, Central Ops $10m, Kitumba $200m Shareholder approval is required for any significant changes so the Board can't simply sell and give the proceeds to Orion without approval, but then why would shareholders approve if there was nothing in it for them.

firesale is the worst possible outcome for Orion, they could end up writing off $110-120m

I hear that Orion are still supporting the company. In a forced sale Orion could get as little at �10m. Unless WTI have grossly exaggerated the Tschudi position then Orion's only real hope is to hang onto Tschudi revenues. You know that any sale (whole or part) requires shareholder approval.

Bill the debt is c$125m = �90m

On the one hand the relationship looks like its broken down. But on the other they need each other to survive.

So one minute the company is insolvent to the tune of $50m, the next minute Directors see value for themselves but not for the listed company which employs them?

Its not clear if Orion are saying they wont fund the development or the purchase or both? The purchase could be covered by WTIs cash in the bank although this money is really Orion�s. Perhaps it�s a challenge to WTI to say figure out the funding and we will discouple the Tschudi debt to make the deal happen.

TDT can be a bit tetchy but he�s not a ramper and does contribute more than most to this forum.

Orion has a sweep on cash so not possible to buy without their support. None of the assets will get developed unless theres a de-linkage between the PLC and the Tschudi debt, there is a future if they can separate off Tschudi.

What are Orion�s options? 1) Cut their losses now. Force an asset sale, raise $10-20m, write off $105-115m. 2) Play a short/medium term game, take the cash flows from Tschudi over the next 2-3 years $40-60m, if Cu goes loopy then $80-100m as LoM extends. Allow BA & CO to be developed. Currently worth $1-2m but with a combined NPV of $90m? Orion will make more money financing BA than dividends or selling it off now for $1m. I genuinely don�t know what WTI directors are hoping to achieve putting the company up for sale other than a benchmarking exercise on the assets. If there was a chance of raising $20m for BA or $10m for CO then it would make a difference but they�ll $0.5-1.0m for BA and $300-500k for CO.

The RNSs today suggest Weatherly is insolvent to the tune of at least $50m unless we get $8000/t very rapidly. Have been mulling over some of the options: 1) Administration as preferable to liquidation but Orion write off c$50-70m, members get zero. The Administrator doesn't sell but keeps the mine running until uneconomic. Note the WTI Directors are currently behaving like de facto Administrators which is odd as their duty is to the Members. 2) Liquidation sees Orion write off $120m sobering but unlikely. 3) Debt restructure a. No haircut but payments rescheduled over the life of Tschudi but now uncertain LOM. b. Orion take a $50m haircut, flexible repayments guarantored on ring fenced Tschudi revenues. Without a firewall then very difficult to develop the other assets (ditto for 3a) c. Debt for equity would be so massive to have any impact that I doubt Members would agree. 4) Tschudi (+debt) sale to Orion $1 leaving Weatherly shell owning Central Operations & Berg Aukas. A fire sale of the latter assets generates $2m? which is peanuts so Orion owning 25% of $74m NPV Berg Aukas and perhaps $10m NPV Central Ops is worth more in the medium term. Weatherly keeps tax losses. 5) Asset sales a. the PLC possible but only to Orion b. Tschudi worth $20-30m if debt free and given the LOM c. Berg Aukas $74m NPV, recent deal sees it valued at just $1m d. Central Ops has $6m in assets but worth $500k-�1,000k to Shali mining (nobody else is going to buy)

Best case scenario: Debt restructure & ring fencing cashflow (June/July) Q4 on nameplate target C1 $5250 (July) New CEO Recovery rates 80%, LoM updates (July-Aug) Wait and see on Cu price. Worst case: share suspension

The old news was simply about starting repayments. Multiple tranches were payable at the same time and this was evidently proving difficult. It was thought long term restructuring would smooth the payments out but what they're saying today is LoM is compromised with C1 $5500-$6000, and they won't be able to meet all repayments $124m

We need to understand the nature of the loan charges and if there's a firewall around the debt i.e. if Orion call in the loan does the Tschudi operating company (which owns the asset) go into administration or does the London PLC ultimately hold the liability? For what its worth Orion are not going to call in the loan otherwise they take an immediate $120m loss. Assuming C1 $5500, Cu $7,000 they might expect to recover $50-70m over the next 3 years so they'll do a deal to ring fence all Tschudi cash.

I don't disagree with the sentiment but how then in your opinions will it be financed and which plan will they implement?

This broker note from 2014, pages 19-24 gives good info on central ops. From memory it closed in 2015 when copper price fell below costs. http://weatherlyplc.com/wp-content/uploads/2014/03/RFC_Ambrian_Weatherly_International_March_2014_web.pdf

John Bryant (Chairman) was distinctly cool at the AGM (Jan18) but that could have been in the context of a Kitumba mega deal. Can't see Bryant staying much longer once Craig Thomas leaves.

We've sunk $1-2m? including the deposit into Kitumba so keen to hear what the problem is although the parties might hide behind non disclosure agreements. Is this the reason Craig resigned?

It was a call option on the Cu price but it was unclear when or if WTI could make cash out of it.