Weatherly International Issues Debt Repayment Warning, Shares Plummet

19th Mar 2018 09:33

LONDON (Alliance News) - Shares in Weatherly International PLC fell sharply Monday as it cautioned it was unable to meet loan repayments amid its interim losses narrowing on exceptional copper production levels in Namibia.

Shares in Weatherly were trading 26% lower at 1.34 pence on Monday.

For the six months ended December 31, pretax loss narrowed to USD5.9 million from USD11.3 million the year prior. This was after revenue grew to USD47.7 million from USD37.8 million the year before.

This was amid copper cathode production rising to 8,844 tonnes from 4,739 tonnes the year prior, helped by a strong December quarter performance. This is compared to 14,759 tonnes being produced during the financial year ended June 2017.

"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 its nameplate producing capacity of 17,000 tpa [tonnes per annum] copper cathode," Weatherly said in a statement.

In the three months ended December, Tschudi in Namibia produced 4,739 tonnes of copper cathode which was 11.5% above its nameplate production.

The C1 cost rose to USD4,944 per copper tonne from USD4,551 per tonne the same period the year before. This was, however, still below the USD5,288 per tonne C1 cost in the previous full financial year.

Weatherly warned, however, that it was due to pay USD20 million in repayments to Orion Mine Finance (Master) Fund I LP by the end of March after renegotiating its loans in August 2017. Weatherly said it was "unlikely" to generate enough cash to meet the revised loan repayments schedule.

The company's "ability to continue as a going concern will be dependent on Orion's continued support, of which there is no certainty", it explained. Weatherly did argue, however, that should Orion defer repayments Tschudi will generate enough cash to remain as a going concern.

In December, Weatherly agreed to acquire 100% of the Kitumba copper project in Zambia. In February, Weatherly agreed to acquire a further 65% stake CARN to increase its holding to 90%. CARN wholly-owns the Berg Aukas zinc-lead-vanadium project near Grootfontein in Namibia.

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