Weatherly International Plc Regulatory News (WTI)

15 Apr 2009 07:00



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

Quarterly Update for the Period Ended 30 March 2009

Weatherly International Plc (WTI) provides the following update in respect of its activities for the three months ended 31 March 2009. Weatherly operates two subsidiaries in Namibia, Weatherly Mining Namibia ("WMN") and Namibian Custom Smelters ("NCS"). 

WMN

Weatherly Mining Namibia placed all four of its copper mines on care and maintenance in December 2008. At the time of closure the mines were producing approximately 10,000 annualised tonnes of copper contained in concentrates. Remaining resources were last estimated at 30 June 2008 to be approximately 629,174 tonnes of copper and Weatherly is currently considering various options to maximise the value to the Company of these resources and associated assets. With all mines placed on care and maintenance, the Company has taken the opportunity to evaluate various strategies for the development of the mines in a sustainable manner in readiness for when markets improve. 

During the quarter, WMN's subsidiary, Ongopolo Mining Limited ("OML"), sold moveable plant and equipment as part of its asset disposal program. An auction was held on April 2 at which equipment from OML's Central Operations, representing approximately 60% of the company's mobile fleet (book value US$9 million), was offered to prospective buyers. Of the equipment offered for sale, approximately 2/3 was sold raising US$2.5 million. The sale of the balance of the equipment offered for sale is currently under negotiation which would raise around a further US$1.5 million. In the current market, the Directors consider the sales to be at a fair and reasonable price.

The proceeds of the auction, together with a further US$1.1 million arising from real estate sales, will be applied in paying creditors of OML and in making future payments to the holders of Weatherly's convertible loan notes. 

NCS

The Tsumeb smelter continued to operate as a full custom facility processing imported concentrates from Bulgaria, Peru, Greece, Zambia and South Africa. In all, 29,546 tonnes were processed during the quarter, generating revenues of US$7.7 million. Operating costs were in line with expectations resulting in an overall operating margin of 23% for the period.

Over US$6 million has been budgeted for the remainder of 2009 to be spent on the continuing upgrade of the smelter and associated environmental safeguards. Of this budget, approximately US$5 million relates to the construction of an oxygen plant which will increase smelting capacity by circa 40%, with a proportional reduction in unit costs. Earthworks for the oxygen plant are already underway and the plant is expected to be commissioned in the last quarter of 2009. The upgrade of the smelter is fully funded by the US$11.3 million facility provided by Louis Dreyfus Commodities and Chelopech Mining EAD in December 2008. 

Corporate

The Company's cash at bank as at 31/3/09 was US$526,000