Last checked at 8 Jan 2016 07:00
08 January 2016
Weatherly International plc
(AIM: WTI)
Releases Option on Tsumeb Tailings Facility
Weatherly International Plc ("Weatherly" or the "Company") today announces the release of its option to purchase the Tsumeb tailings facility from Dundee Precious Metals Tsumeb (Pty) Ltd, a subsidiary of Dundee Precious Metals Inc. ("Dundee") for US$4 million (the "Settlement"), which will be settled by applying a credit, at the rate of US$40 per tonne, against the cost of sulphuric acid being supplied by Dundee to the Company.
As part of the sale of its smelter operation to Dundee in 2010, Weatherly's subsidiary, Ongopolo Mining Limited ("Ongopolo"), was granted an option ("the Option") to re-purchase the Tsumeb tailings facility, subject to the reservation of certain rights of disposal and mining in favour of Dundee and subject to the obligation to maintain various mining and related licenses and permissions. The Option was exercised by Weatherly, following which the Company undertook drilling on the tailings site and declared a JORC (2004) Measured Mineral Resource of 12 million tonnes grading 0.48% Copper, 0.77% Lead, 0.63% Zinc and 12.74g/t Silver in 2011.
The Tsumeb tailings were held at no cost on the Company's balance sheet and the Company has not incurred any additional expenditures in relation to the tailings facility in the financial year to 30 June 2015.
This Settlement effectively cancels Ongopolo's rights under the Option, which had not yet resulted in title to the tailings facility being transferred to Ongopolo. Consideration of US$4M for Dundee retaining ownership of the tailings facility, which forms part of its smelter optimisation plans, will be satisfied by the application of a credit of US$40 per tonne on sulphuric acid supplied by Dundee to the Tschudi mine.
Concurrently, Weatherly and Dundee have also entered into an amended and restated supply agreement for Dundee's delivery of sulphuric acid to the Company under which Dundee commenced supply of sulphuric acid during 2015. The commercial terms for the sale of acid remain unchanged.
Chief Executive Officer, Craig Thomas, commented:
"The release of the Tsumeb Tailings rights is a positive move for the Company, bringing an immediate and important cash flow benefit from an asset which would otherwise take several years and significant further investment before delivering any cash return, assuming an economic processing route could be found at all.
"The Board and I are confident in Weatherly's ability to continue to build a successful project at Tschudi and I look forward to updating shareholders with further progress in due course."
For further information please contact:
Weatherly International plc +44 (0) 20 7936 9910
Craig Thomas, Chief Executive Officer
Kevin Ellis, CFO and Company Secretary
RFC Ambrian Limited +44 (0) 20 3440 6800
(Nominated Adviser & Broker)
Samantha Harrison / Kim Eckhof
Finncap +44 (0) 20 7220 0500
(Joint Broker)
Christopher Raggett
Blytheweigh +44 (0) 20 7138 3204
(Financial PR) Tim Blythe / Camilla Horsfall / Megan Ray
About Weatherly
Weatherly is an AIM listed copper mining company operating in Namibia in southern Africa. Its principal assets are one operating open pit copper mine called Tschudi and two underground copper projects called Otjihase and Matchless.
The Company also has a 25% stake in the AIM listed company, China Africa Resources plc (AIM: CAF), which is developing a lead/zinc mine called Berg Aukas, also in Namibia.