Weatherly International Plc Regulatory News (WTI)

26 Apr 2006 08:00

Weatherly International PLC26 April 2006 26 April 2006 WEATHERLY INTERNATIONAL PLC CHAIRMAN'S STATEMENT The Year in Review The results for the year represent the first steps aimed at turning Weatherlyinto a major player in the Southern African mining industry. In December 2005, the Group acquired the entire share capital of Puku MineralsLimited, a company incorporated in Zambia. The consideration of £3,250,000 wassatisfied by way of an issue of 40,625,000 ordinary shares at an issue price of8p per share. Puku Minerals Limited holds prospecting licences which cover the historicLuanshya underground copper mine, its tailings dams and other areas situated inZambia. Puku Minerals Limited holds the right to explore and develop theLuanshya tenements. Further information on Luanshya may be obtained from theCompany's website. Weatherly has a strong financial position having raised £3.9 million (net ofexpenses) through a programme of equity placings during the second half of theyear. These funds have been earmarked to progress the Luanshya Copper Project tothe development stage, including the bankable feasibility study, provide fundsfor general working capital and to finance the investigation of strategicacquisitions. Board Appointment Following the resignation of Mr Richard Armstrong the Board appointed Mr JohnBryant as non-executive director. John is on the Board of several AIM listed companies and brings a wealth ofexperience to the Board. He previously served as President of Cinergy GlobalResources Corp, responsible for all international business and global renewablepower operations of this US based electricity and gas utility provider. Priorto joining Cinergy, Mr. Bryant's professional experience was gained withMidlands Electricity plc, as Executive Director, Generation, British Sugar plc,Drexel Limited, British Oxygen Company Limited and Unilever plc. Proposed investment in Ongopolo We have separately announced today that the Company has signed a Heads ofAgreement to acquire an initial 56 per cent interest in the share capital ofOngopolo Mining & Processing Limited ("Ongopolo") for a cash investment of US$30million (£16.8 million). Ongopolo, a private Namibian company, is a coppermining and smelting company with activities in central and northern Namibia. Itoperates three copper mines and a smelter and is developing a number of advancedexploration projects. New projects include the Asis Far West mine where an 800metre shaft was recently completed and lateral development to the main ore bodyis in progress. Two of the operating mines (Otjihase and Matchless) are located near Windhoek,the capital of Namibia. The other operating mine is located at Kombat with thesmelter located at Tsumeb, both in the northern part of the country. During theyear ending 31 December, 2005, Ongopolo's smelter produced approximately 24,000tonnes of copper with approximately 50% from internal mine production and therest from imported concentrates. Based on an independent technical reportprepared in 2004, Weatherly estimates that Ongopolo has sufficient knownreserves for the next five years, plus sufficient resources from its existingleases to expand the reserve base by a further 5 years. The proposed Ongopolo investment is subject to due diligence and funding. Owingto its size, the transaction will constitute a reverse takeover and will beconditional on Weatherly shareholder approval. In consequence, Weatherly shareswill be suspended pending the completion of the transaction and applicationfor readmission. Funding for the investment is to be provided by the proposed placing of £18million of new Weatherly shares (the "Placing"). In addition, the Company hasexisting cash resources of £3.5 million. The Placing will take place in twostages, the first having already been completed. Commitments have been receivedin respect of £9.1 million representing 87,215,000 new Weatherly shares to beplaced at 10.5p. These initial funds have been raised unconditionally. The balance of the Placing, which will be conditional upon the completion of theOngopolo transaction, will take place when a new Competent Person's Report isavailable on Ongopolo's operating and exploration assets. Weatherly will herewith contribute substantially to the establishment of aregionally significant copper corridor that links the copper producing areas ofthe Democratic Republic of Congo and the Copper-belt of Zambia with the copperproducing regions of Namibia, including the smelter at Tsumeb and the importantNamibian port of Walvis Bay on the Atlantic Coast. This would fulfill a visionpromoted for many years by governments and industry in those regions. Theacquisition is also part of a regional strategy whereby Ongopolo's smelter couldbe expanded to process concentrates from both Weatherly's own Luanshya projectand others in Zambia and the Congo. Luanshya Puku Minerals Limited has recently completed a drilling programme of thetailings dams using a leading South African contractor. The results arecurrently being assessed and a resources report is expected in early May. Thiswork will pave the way for a full feasibility study. In parallel, Weatherly intends to seek clarification on the status of additionalsurface access rights to PLLS 239 from the previous owner (Luanshya Copper Minesplc) These discussions have no impact on Weatherly's ability to develop thetailings dams where Weatherly has full access. Weatherly recently lodged a legal claim in Zambia seeking confirmation that theoxide caps on prospecting licence PLLS 239 belong to Weatherly. This claim wasaccompanied by an opinion in support of Weatherly's claim from one of Zambia'stop State Councils. This claim will be reviewed by the Attorney General inZambia. Weatherly continues to regard Luanshya as a highly prospective project, and isconfident that it is an excellent core asset for the Company as we move towardsthe full feasibility study. Website I am pleased to direct you to our recently launched website www.weatherlyplc.com. The Directors believe that the website will enable investors and potentialinvestors to keep abreast of the Company's progress during this exciting periodof growth. For further information please contact: Weatherly International plc +44 (0) 20 7917 2989Wolf Martinick, ChairmanRod Webster, CEOJohn Norris, Company Secretary First City Financial +44 (0) 20 7436 7486Sarah Samworth WEATHERLY INTERNATIONAL PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2005 2005 2005 2005 2004 Continuing Acquisitions Total Total Notes £ £ £ £ TURNOVER - - - - Administrative expenses:- other 2 300,463 46,265 346,728 54,637 - Provision for impairment in the carrying value of intangible assets 3 - 459,592 459,592 - ________ ________ ________ ________ (300,463) (505,857) (806,320) (54,637) Other operating income 5,000 329 5,329 - ________ ________ ________ ________ OPERATING LOSS 2 (295,463) (505,528) (800,991) (54,637) ________ ________ ________ ________ Interest receivable and similar income 23,260 3,465 ________ ________ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (777,731) (51,172) ________ ________Tax on loss on ordinary activities - - ________ ________LOSS FOR THE FINANCIAL YEAR AFTER TAXATION (777,731) (51,172) ________ ________DEFICIT FOR THE YEAR (777,731) (51,172) ________ ________ ________ ________ LOSS PER SHARE IN PENCE 4 (2.22) (0.62) ________ ________ ________ ________ WEATHERLY INTERNATIONAL PLCCONSOLIDATED BALANCE SHEETAT 31 DECEMBER 2005 2005 2004 Notes £ £ £ £FIXED ASSETSIntangible assets 3 3,400,000 - CURRENT ASSETSDebtors 93,674 1,175Cash at bank 3,652,906 130,385 _________ _________ 3,746,580 131,560CREDITORSAmounts falling due within one year 140,736 9,155 _________ _________ NET CURRENT ASSETS 3,605,844 122,405 _________ _________TOTAL ASSETS LESS CURRENTLIABILITIES 7,005,844 122,405 _________ _________ _________ _________CAPITAL AND RESERVESCalled up share capital 956,790 282,417Share premium 8,269,168 4,755,990Merger reserve 3,473,619 -Profit and loss account (5,693,733) (4,916,002) _________ _________SHAREHOLDERS' FUNDS 7,005,844 122,405 _________ _________ _________ _________ WEATHERLY INTERNATIONAL PLCCONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2005 2005 2004 Notes £ £Net cash outflowfrom operating activities 5 (399,817) (132,635) Returns on investments andservicing of finance 23,260 3,465 _________ _________ (376,557) (129,170) Financing 6 3,899,078 224,951 _________ _________Increase in cash in the period 3,522,521 95,781 _________ _________ _________ _________ WEATHERLY INTERNATIONAL PLC NOTES 1. GENERAL The financial information herein does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information has been extracted from the Group's 2005 statutory financial statements upon which the auditors reported on 13 April 2006. The opinion is unqualified and does not include any statement under section 237 of the Companies Act 1985. The accounts have been prepared in accordance with applicable accounting standards and under the historical cost convention. Copies of the annual report will be available from the company's registered office in the near future. 2. OPERATING LOSS The operating loss is stated after charging/(crediting): 2005 2004 £ £ Auditors' remuneration - audit services 17,000 4,138 Auditors' remuneration - non-audit services 3,000 - Foreign exchange differences (329) - ______ ______ ______ ______ In addition to the above, the auditors received £38,000 for Reporting Accountant work which has been charged to the share premium account. The continuing administrative expenses of £300,463 were substantially incurred by the company during its transition from a cash shell to a minerals development company. 3. INTANGIBLE ASSETS The carrying value of the mineral rights were considered as was the requirement for an impairment. The cost at the fair value of the consideration is £3,859,592. This was compared to the Behre Dollbear Australia Pty Limited valuation for the purposes of the Admission Document of £3,400,000. Hence an impairment of £459,592 was required to write the asset down to its recoverable amount. Mineral Exploration Group Licence costs £ COST Investment in Puku Minerals Limited 3,250,000 Investment in WM Exploration Limited 512,092 Zambian stamp duty 97,500 _________ At 31 December 2005 3,859,592 _________ PROVISION FOR IMPAIRMENT Provided during the year 459,592 _________ At 31 December 2005 459,592 _________ NET BOOK VALUE At 31 December 2005 3,400,000 _________ _________ 4. LOSS PER SHARE Loss per ordinary share has been calculated using the weighted average number of shares in issue during the relevant financial years. The weighted average number of shares in issue was 2005: 34,970,328 (2004: 8,152,703) and the earnings attributable to shareholders, being losses after tax, were £777,731 (2004: £51,172). Due to losses, there is no dilutive effect of Warrants to subscribe for ordinary shares. 5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2005 2004 £ £ Operating loss (800,991) (54,637)Provision for impairment in the carrying valueof intangible fixed assets 459,592 -Increase in debtors (92,499) (1,175)Increase/(Decrease) in creditors 34,081 (76,823) _________ _________Net cash outflow from operating activities (399,817) (132,635) _________ _________ _________ _________ 6. FINANCING 2005 2004 £ £Returns on investments and servicing of financeInterest received 23,260 3,465 _________ _________Net cash inflow for returns on investments andservicing of finance 23,260 3,465 _________ _________ _________ _________FinancingIssue Costs (586,948) (25,049)Share issue 4,486,026 250,000 _________ _________Net cash inflow from financing 3,899,078 224,951 _________ _________ _________ _________ This information is provided by RNS The company news service from the London Stock Exchange