Weatherly International Plc Regulatory News (WTI)

Weatherly International plc ('Weatherly' or the 'Company')

Central Operations Update

HIGHLIGHTS

·; Decision taken to proceed with production restart at Otjihase and Matchless

·; Production expected at Otjihase in Q1 2011 and at Matchless in Q2 2011

·; Life of mine plans verified by independent technical review produced by Coffey Mining

·; Average annual production of approximately 7,000 tonnes of copper contained in concentrates over five year period with peak production of over 9,000 tonnes in 2013/14

·; Orders placed for long lead time items - significant savings to date versus Coffey mine capital estimates

·; Funding requirements fully satisfied by US$7 million offer of funding from Louis Dreyfus Commodities and proceeds from agreed asset sales (US$5.4 million) in Namibia

·; Negotiations progressing with four potential local equity partners

·; Contract mining model expected to maximise operating efficiencies

RESTART PROGRAMME

On 29 March 2010, the Company announced the results of an independent technical review by Coffey Mining (SA) Pty Ltd ('Coffey Mining') of its plans to restart production at its Otjihase and Matchless mines in Namibia (the 'Central Operations').

Weatherly is pleased to announce that following significant progress in securing the funding package and local participation considered necessary to restart production on a sustainable basis, a decision has been taken to proceed. The restart programme is based on the Coffey Mining report with first production expected at Otjihase in Q1 2011 followed by the restart of production at Matchless in Q2 2011, subject to receipt of final government consents.

The key features of the restart programme as set out in the Coffey Mining report include:

·; Delivery of an average annual production of 7,000 tonnes of copper contained in concentrates over the five year period with production peaking at just over 9,000 tonnes in 2013/14.

·; Average unit operating costs over the five year plan of US$ 3,258/t of copper after all realisation costs and precious metal credits.

PURCHASE OF LONG LEAD ITEMS

In order to secure the programme for the reopening of the Central Operations while the detailed negotiations continue, the Board has authorised the placement of orders for the long lead items including six trucks and two loaders. The terms for the purchase of these items represent a significant saving in capital expenditure of circa 50% compared with the costs allocated for these items in the Coffey Mining report announced in March 2010.

LOCAL PARTICIPATION

An essential element of the plans for recommencing production at the Central Operations has been securing local participation. In order to facilitate this local involvement, the Company has provisionally allocated an equity interest in the Otjihase and Matchless mines of up to 20% for local partners.

Memorandums of Understanding have been signed with two groups; Labour Investment Holdings, a Namibian union umbrella organisation, and Shali, a local company that is expected to be involved in the operation of the mines as a contractor. The Company is also in discussions with Epangelo, the newly formed Namibian state mining Company, and NAM-MIC, the investment arm of the local mineworkers union.

Weatherly expects to conclude negotiations and finalise the allocation of shareholdings within the 20% interest allocated for local partners shortly. The Company is in the process of establishing an appropriate corporate holding structure to facilitate the envisaged local participation while utilising brought forward tax losses of approximately US$100 million.

OPERATING MODEL

Weatherly proposes to operate the Otjihase and Matchless mines under a system of contract mining with operations allocated to discrete manageable contracts to improve accountability and maximise operating efficiencies while retaining direct control of elements such as mine planning and grade control. The Company is currently in negotiations with a number of potential contractors including parties which have participated in the operation of the Otjihase and Matchless mines previously.

Under the proposed operating model, the number of employees directly employed by the Company will be reduced significantly and be limited largely to management personnel and key technical and financial roles.

Weatherly is currently in the process of recruiting additional senior management to support the restart programme.

FUNDING

The Company has received an offer of funding, subject to contract and customary due diligence, of US$7 million from Louis Dreyfus Commodities with repayment terms linked to copper concentrate production, a model which the Company considers reduces risk by better matching the debt servicing obligations to project cash flow. Louis Dreyfus Commodities is a leading trader of non-ferrous raw materials and is very pleased to be able to continue its relationship with a company that has proved itself to be a reliable and supportive partner.

The balance of the funding required for the restart of production is expected to be funded from cash on hand plus the proceeds of the sale of the Kombat mine and from agreed real estate sales. A bank guarantee has been received for the Kombat sale, and transfer of funds is only conditional on Ministerial consent, which is expected shortly.

The Company does not expect to have to make any further contributions from its corporate cash resources outside of Namibia which as at 30 June 2010 stood at approximately US$6.4 million following the settlement of a contingent liability with Barclays plc and the payment of creditors in Namibia.

The funding package takes no account of additional sources of possible income and funding including funding as a result of local partner equity participation, sale and lease back and arrangements as part of anticipated mining contracts and an ongoing insurance claim in relation to the flooding of the Kombat mine.

Following these important board decisions the Company will now be working to conclude the detailed legal agreements to implement these arrangements and achieve the target of mine production in Q1 2011.

Rod Webster, CEO of Weatherly commented:

"We have made significant progress in finalising our mine plans. These now incorporate a number of elements that will reduce the overall risk leading to a more robust project. We will also take advantage of our proximity to the Namibian capital, Windhoek, and will outsource many of the functions previously carried out in-house. We expect to secure committed local partners for the success of this and future projects. Whilst there is considerable work still to be done in tying down the detailed contractual terms, we expect capital and operating costs to be well within the parameters of the Coffey report and are on target to achieve the returns indicated in the Coffey report.

ABOUT WEATHERLY

Following the sale of its smelter in March 2010 and having repaid its debts, Weatherly is now focussed on the development of its mining assets. This process is starting with Otjihase and Matchless but will continue with the development of the open plan mine at Tschudi. The objective is to develop a copper mining business of sustaining approximately 20,000 tpa of copper production at average industry cost of production for the next ten years. Weatherly is seeking to create value from its other assets which include the Berg Aukas lead zinc mine, the Tsumeb mines and surrounding exploration tenements.

For further information please contact:

Rod Webster, Chief Executive Officer Weatherly International Plc

+44 (0) 20 7917 2989

Richard Greenfield / Jen Boorer, Ambrian Partners Limited

+44 (0) 20 7634 4710