Last checked at 19 Jan 2018 07:00
19 January 2018
This Announcement includes release of insider information
Weatherly International plc
("Weatherly" or "the Company")
Quarterly Operations and Production Update
Weatherly International plc (AIM: WTI) announces its update for the quarter ended 31 December 2017.
Summary
· Tschudi cathode production improved by 15% quarter on quarter to 4,739 tonnes, which is 11.5% above nameplate over the quarter
· Tschudi C1 costs reduced by 16% to US$4,551 per tonne
Tschudi Production Performance
Production results for the quarter ended 31 December 2017
Quarter ended Mar-17 | Quarter ended Jun-17 | Quarter ended Sep-17 | Quarter ended Dec-17 | |
Total (Ore + Waste) Mined (000 tonnes) | 5,117 | 6,051 | 6,314 | 5,869 |
Ore Tonnes stacked (000 tonnes) | 563 | 726 | 666 | 733 |
Ore Stacked grade (per cent) | 0.86 | 0.99 | 0.78 | 0.65 |
Copper Cathode Produced (tonnes) | 3,236 | 3,386 | 4,105 | 4,739 |
C1 Cost (US$/t) | 5,907 | 6,344 | 5,402 | 4,551 |
Tschudi production for the December quarter was 4,739 tonnes of copper cathode, or 11.5% above nameplate. This brings year to date production to 8,843 tonnes or 4% ahead of nameplate half way through the financial year. This outcome was assisted by some short-term benefits from relatively-fast leaching of additional oxide ore mined from an interim pit pushback bringing forward some leaching output. The grade of this additional oxide ore was lower, reducing the tonnage of contained copper metal stacked in the quarter. Some early seasonal rains were received on site but they have had minimal impact upon the operation thus far.
Mining and stacking of slower-leaching mixed ore has resumed, and the main wet season is now approaching.
Construction of the heap leach pad extension is complete. Some operational delays are expected during a typical local rainy season, but the expected impacts are reduced due to stacking of ore on new leach pads rather than upon previously leached ore, and because healthy stockpile levels of ore have been placed on the ROM pad near the crusher in anticipation of rain delays impacting mining. Forced aeration of some panels has commenced as part of ongoing testing of how leach rates for mixed and sulphide ore may be improved under modified operating conditions designed to increase bacterial activity in the heap.
Open pit groundwater inflows, and the costs of dealing with them, continue to increase as pit mining proceeds to greater depths, but the flow rates are being managed adequately to ensure a reliable supply of ore for stacking.
While the strong December quarter demonstrates the capacity of the Tschudi SXEW plant to operate at well above nameplate levels when leaching rates provide sufficient copper into solution, full year production is not expected to exceed nameplate.
As a result of the improved production levels, Tschudi C1 unit costs have fallen to US$4,551 per tonne. The Namibia Dollar strengthened notably in December, and this will impact US$ costs going forward if it is sustained.
Loan draw downs and hedges
Weatherly advises it has made no further drawdowns on the US$10 million uncommitted loan from Orion Mine Finance announced on 28 July 2017 to accelerate the building of the leach pads and to fund working capital requirements at Tschudi. The Company has only drawn down US$3m on the loan. To seek to ensure the loan would be sufficient to meet the necessary funding requirements the Company has hedged both copper and currency out to July 2018. In addition to hedges previously announced, Weatherly has 990 tonnes fixed in July at an average copper price of US$7,171 per tonne
As previously advised on 28 April 2017 as a loan rescheduling fee, Orion has the right (but not the obligation) to buy, if available, up to 700 tonnes of unhedged cathode each month from Weatherly until 30 April 2018 at a price of US$6,000 per tonne. Orion can only exercise its option to the extent of unhedged tonnes produced in the month and so far this financial year Orion has not elected to do so.
The Company and its subsidiaries are unlikely to generate sufficient surplus cash to meet all loan repayments when due, particularly in the near term. The Company continues to positively engage with Orion on the subject.
For further information please contact:
Weatherly International plc +44 (0) 1707 800 774
Craig Thomas, Chief Executive Officer
Kevin Ellis, CFO and Company Secretary
RFC Ambrian Limited +44 (0) 20 3440 6800
(Nominated Adviser & Broker)
Nominated adviser contact: Stephen Allen / Bhavesh Patel
Broker contact: Charlie Cryer
About Weatherly
Weatherly is an AIM listed copper mining company operating in Namibia in southern Africa. Its principal assets are the Tschudi Mine and the Otjihase Project. The Tschudi Mine is an operating open pit mine producing refined copper cathode on site. The key assets of the Otjihase Project are the Otjihase underground copper mine and concentrator and the Matchless West underground copper mine. The Otjihase Project assets are currently under care & maintenance while in the Project Development stage. Weatherly also owns 25% of China Africa Resources Namibia (CARN), a private Namibian company which owns the high-grade Berg Aukas underground zinc-lead-vanadium project. On 12 December 2017, Weatherly announced that it had entered into an agreement to purchase the Kitumba copper development project in Zambia, subject to regulator and vendor shareholder approvals.