TIDMWTI
RNS Number : 9897P
Weatherly International PLC
24 November 2016
24 November 2016
Weatherly International plc
("Weatherly" or "the Company")
Project Development Update at Tschudi and Otjihase
Weatherly International plc (AIM: WTI) provides the following
update on project development opportunities at Tschudi and
Otjihase.
Summary
-- Tschudi nameplate production rates of 1,417 tonnes per month
(tpm) have been re-attained during October, two months earlier than
forecast.
-- As part of the potential Tschudi expansion project to 20
thousand tonnes per annum (20ktpa), the Tschudi Solvent Extraction
(SX) and Electro-Winning (EW) plants have already demonstrated the
capacity to operate at 20ktpa rates with significantly reduced
capital expenditure requirements.
-- At Otjihase and Matchless, safe and productive underground
mining skills development is critical to unlocking the opportunity
to resume production at sustainable unit costs in future.
-- The Company has identified a low-risk and potentially
incrementally cash-generative opportunity to commence with its
skills development programme at Otjihase. The Company plans to
study the opportunity further before taking a decision to
proceed.
-- The Company intends investigating the potential for such
skills development to support a strategic goal of achieving
10-12ktpa of contained copper in concentrate from the underground
mines at C1 costs below US$2/lb.
-- The Company has entered into a Cooperation Agreement with the
holder of the Ongombo prospecting license, a prospective copper
deposit in close vicinity to the Otjihase mine and
concentrator.
-- An updated Investor Presentation has been posted on the Company's website.
Craig Thomas, CEO of Weatherly, commented:
"Further operational optimisation at Tschudi, plus project
development at Otjihase and Matchless offer significant potential
value for Weatherly.
"The mineral resources at Otjihase and Matchless plus the
installed processing plant capacity present a valuable opportunity
for the Company to resume production at higher production rates and
lower unit costs than were achieved during the period from 2011 to
2015.
"Such an opportunity however will be critically dependent on the
development of underground mining operator skills. The Company has
identified a low-risk opportunity to start a skills development
programme in a manner which could be incrementally cash-generative
at current spot prices within six months of commencement.
"We continue to prudently advance project work in both areas and
look forward to updating the market in due course."
Tschudi nameplate production re-attained early
In October the Company repeated its Tschudi guidance from July
that nameplate production rates of 1,417tpm would be re-attained by
December 2016, following the reduced production in the June and
September 2016 quarters due to excessive groundwater inflow to the
pit. The Company is now pleased to announce that nameplate rates
were in fact re-attained in October, two months earlier than
forecast.
20ktpa Tschudi Expansion Opportunity Update
In December 2015, the Company announced that the opportunity to
expand Tschudi production capacity to 20ktpa would require
expenditure of US$1.2M. In the same update, the Company reported
that life-of-mine C1 cost estimates had improved to US$1.75/lb for
production of 17ktpa, with expected modest improvements in Life of
Mine C1 unit cost to US$1.72/lb under the 20ktpa scenario.
Subsequent optimisation of the operating parameters used within
the Solvent Extraction and Electro-Winning plants have now reduced
this capital estimate to US$0.2M. Focus for the expansion
opportunity evaluation has now shifted to evaluating mining, pad
development, stacking, and leach scheduling paths to sustain such a
potential expansion and quantifying potential operating cost
savings from the expansion.
Otjihase and Matchless Project Development Update
The mineral resources at Otjihase and Matchless plus the
installed processing plant capacity present a valuable opportunity
for the Company. Success will be dependent on achieving higher
production rates and lower unit costs than were achieved during the
period from 2011 to 2015. This will be critically dependent on
safer and more productive underground mining execution capability
and operator skills development in this area is the critical
requirement to unlock the opportunity.
The geology and processing characteristics of the Otjihase and
Matchless orebodies are well understood and off-take agreements
remain in place for the high-quality concentrate which can be
produced. While some further geological resource development work
may be required over time, for example to upgrade the historical
estimate at Old Matchless to a JORC Mineral Resource Estimate and
to upgrade and extend the Matchless Western Extension resource
estimate down plunge, the critical-path to implementing a
sustainable restart of operations lies with underground mining
skills development.
The Company has identified a potential opportunity to commence a
skills development programme in a manner which could be
incrementally cash-generative at current spot prices within six
months of commencement, partially offsetting current care and
maintenance costs being incurred at the sites. Ultimately it is
envisaged that a period of up to two years may be required to
develop the requisite improvements in underground mining operator
skills and to train sufficient Namibians to the best international
standard and fully realise the potential of Otjihase and
Matchless.
Under the proposal, small scale mining and campaign processing
would be conducted by a small team in the first scheduled primary
mining area at Otjihase. All of this mining would be conducted in
ore and the programme would commence with the establishment of
productive and safe primary mining systems. These systems would
provide multiple benefits including:
-- developing the training materials required and "training the trainers";
-- advancing access deeper into the future production area which
is expected to expose higher ore grades and open up additional
working areas required for future production rate increases and
additional training operations - effectively we would be "building
the classrooms";
-- reducing longer-term commercial risks via a low-risk
proof-of-concept demonstration that the improved safety,
productivity and unit costs required can be achieved before
attempting to scale them up; and
-- producing small volumes of ore which can be concentrated at
Otjihase and sold in order to fully fund the ongoing skills
development plus generate a modest incremental cashflow benefit at
current spot prices.
Detailed evaluation and refinement of the training programme
proposal is underway. Key factors in the evaluation will be
assessing the risks of the programme not achieving incremental
cashflow neutrality or better, and the ability to terminate the
programme if key safety and productivity milestones are not met on
schedule.
The current strategic goal envisaged for such a restart would be
safe and sustainable production from the Otjihase Concentrator of
10-12ktpa of copper in concentrate at C1 unit costs of below
US$2/lb. Due to the large amount of underground access
infrastructure in place plus the fact that the Otjihase
concentrator is well maintained and capable of treating up to
800ktpa of ore, the capital expenditure required to deliver such an
outcome is expected to be very low, and would likely rank as one of
the lowest capital intensity copper production opportunities in the
world. A robust and low-risk plan to develop the requisite
underground mining skills is the key to unlocking this
potential.
Cooperation Agreement signed with holder of Ongombo exploration
license
The Company announces that it has entered into a Cooperation
Agreement with Mr Wilhelm Shali, holder of Exclusive Prospecting
License 5772 covering the Ongombo prospect area within 25km of the
Otjihase concentrator. The agreement clarifies the intention of the
two parties to work together to seek to develop mining prospects in
the vicinity of the Otjihase concentrator which may otherwise not
be viable. The parties will initially share technical information
on their respective projects. Previous holders of prospecting
licenses over the Ongombo project reported JORC-compliant resources
of 10.5Mt @ 1.6% Cu in 2012, and the current holder has been
conducting additional exploration work.
Posting of new Investor Presentation
The Company advises that an updated Investor Presentation has
been uploaded to the Weatherly International website.
Weatherly has previously advised that if copper prices remain at
current levels it is unlikely that the Company and its subsidiaries
will generate sufficient surplus cash to meet all loan repayments
when due. This remains the case and the Company continues to
positively engage with Orion Mine Finance (Master) Fund I LP 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 or Bhavesh Patel
Broker contact: Kim Eckhof
Blytheweigh +44 (0) 20 7138 3204
(Financial PR) Tim Blythe / Camilla Horsfall / Nick Elwes
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.
These assets will enable Weatherly to achieve its medium term
goal of establishing a mining business capable of sustaining
approximately 30,000 tonnes per annum of copper production.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLLFERLRLVFIR
(END) Dow Jones Newswires
November 24, 2016 02:00 ET (07:00 GMT)
Wti Oil Etc (LSE:WTI)
Historical Stock Chart
From Apr 2024 to May 2024
Wti Oil Etc (LSE:WTI)
Historical Stock Chart
From May 2023 to May 2024