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19 Nov 2008 13:00
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WeatherlyΒ International plc ("Weatherly" or the "Company")
Β OperationalΒ Update
WeatherlyΒ provides the followingΒ updateΒ with respect to itsΒ mining and smelting operations.Β
Smelting Operations
The 'Ausmelt' furnace at Tsumeb began full operations after a successful 6 week commissioning run in September and October 2008, followed by a short shut down to carry out re-bricking and cooling modifications.Β With the Ausmelt furnace now fully operational, annual smelting capacity is expected to increase from 24,000 to 35,000 tonnes of copper blister per year. This increase in capacity represents a significant step towards building a stand-alone smelter capable of processing complex concentrates from both Weatherly's own assets and other mining companies elsewhere.Β
Weatherly's smelting operations are relatively unaffected by the current copper priceΒ slump asΒ they receive the bulk of their revenues from the custom treatment of imported concentrates.Β Currently two contracts are in place to supply approx 100,000tpa of concentrates from mines in Bulgaria and Peru for a 3 year period.Β
The next important step will be the commissioning of the oxygen plant in 2009, which is expected to increase capacity by a further 60%Β and reduce operating costs.Β
Mining OperationsΒ
In the quarter ended 30 September 2008, Weatherly's Namibian mines achieved record mine production of 2,643t of copperΒ compared withΒ 2,162tΒ in the previous quarter.Β However, in response to the recent decline inΒ worldΒ copper prices WeatherlyΒ has increased itsΒ focus on streamlining productionΒ and lowering costs through the following actions:
InΒ lateΒ October,Β WeatherlyΒ moved to close Tsumeb West, a small mine on the outskirts of Tsumeb, and redeployed the bulk of the workforce to replace the contractor EPS at theΒ Company's Tschudi mine.Β
The Matchless mine nearΒ WindhoekΒ which is also operated by contractorsΒ is currently in the process of closure andΒ will be placedΒ onΒ 'care andΒ maintenance'.Β Β
AΒ further 100 staff will be made redundant from the Company'sΒ two remaining operating mines, Otjihase and Tschudi. This is expected to result in a significant reduction in costs with only a small reduction in overallΒ output.
TheΒ one-offΒ costsΒ associated with the closure ofΒ Tsumeb West and MatchlessΒ are estimated at approximatelyΒ US$2 million, of which approximatelyΒ 50%Β has been incurred to date.Β
WeatherlyΒ has copper hedges in place at US$5,000/t for all its mine productionΒ for the remainder of 2008.Β Weatherly will continue to review its operations in response to volatility in copper prices and is prepared to take further actions to reduce long term costs if the situation demands it.
Enquiries:
Rod Webster, Chief Executive Officer Weatherly International +44 (0)207 868 2232
Richard Brown Ambrian Partners Limited +44 (0)207 634 4700
Richard GreenfieldΒ
Anthony Cardew Cardew Group +44 (0)207 930 0777
Jamie Milton
Matthew Law
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