7th Oct 2014 09:28
LONDON (Alliance News) - Weatherly International PLC Tuesday said its loss widened in its last financial year as lower copper prices hit revenue, and it said it aims to ramp up production in 2015 through its Tschudi copper prospect and make efficiency improvements.
The company's pretax loss widened to USD5.7 million in the year to end-June, from a USD425,000 loss in the 2013 financial year when it had booked a USD2 million compensation settlement.
Revenue dropped to USD32.2 million, from USD35.7 million. Weatherly shipped 4,590 tonnes of copper in fiscal 2014, up from 4,485 tonnes a year earlier, but the average sales price went down to USD7,397 a tonne, from USD8,273 a tonne.
"While copper output and costs were largely unchanged from the previous year, copper prices declined by some 15% further reducing already tight margins. Despite this, the operations remained cashflow positive throughout and were able to meet all ongoing capital and debt repayments," said Chairman John Bryant.
Total output from its two underground copper mines, Otjuhase and Matchless in Namibia, was 5,086 tonnes for the financial year, down from 5,182 tonnes a year earlier despite efforts to increase production in the second half, it said.
The company's unit cash cost for the 2014 financial year was USD6,729 per tonne. "[In] The final quarter of the year we achieved the lowest cost level for the last two years. Management believes that the improvements highlighted below should help us take central operations towards our target production of 7,000 tonnes of copper per year," said Chief Executive Rod Webster.
Throughout the year, the company has been attempting to improve productivity and reduce costs at its two underground mines. Changing from contract mining to owner mining has improved productivity by 67%, it said in statement.
It has also invested in new equipment, including new trucks and a rebuilt drill jumbo to optimise its fleet alongside changing its mining methods. At Otjihase, the company is moving from pillar recovery, which can be costly, to primary mining, although admits pillar recovery will be the major source of ore until the first-half of 2015. At Matchless, it has increased production and lowered levels of grade dilution by changing its mining methods, it said.
Its Tschudi project is 75% complete and expected to deliver its first copper in the second half of 2015. Weatherly sees the project as a "key to the future of the company," adding 17,000 tonnes of copper to existing production, it added. The project is fully funded through an USD88 million debt facility from Orion Mine Finance.
No work was carried out on the company's Northern projects, Tsumeb Tailings and Tsumeb West Mine, said Weatherly.
"The board remains confident about the long-term prospects of copper... Global copper production is currently running at around 17 million tonnes per year. Worldwide, consumption of copper over the next 24 years is predicted to exceed all of the copper ever mined," said Bryant.
Weatherly shares were up 2.6% to 3.59 pence per share Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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