22nd Jul 2016 09:30
LONDON (Alliance News) - Weatherly International PLC Friday said copper cathode production from the Tschudi mine in Namibia should reach full capacity this year but said it recently suffered issues at the mine and is struggling to generate surplus cash at current prices.
Weatherly shares were down 32% to 0.389 pence per share on Friday morning.
Weatherly's Tschudi mine produced its first copper cathode back in February 2015 and has been ramping up during the financial year that ended in June.
A total of 15,884 tonnes were produced in the financial year at an average C1 cash cost of USD4,199 per tonne, below the guidance range of USD4,250 to USD4,350 per tonne. Production was lower in the final quarter of the year compared to the third and second quarter while costs were also higher because of increased rates of groundwater inflow, it said.
Production amounted to 3,554 tonnes in the first quarter of the year, 4,076 tonnes in the second, 4,442 tonnes in the tird and ended the year by producing 3,812 tonnes in the fourth quarter, which was 10% below target, it said.
This year, Weatherly is aiming to produce 17,000 tonnes, which would be at full capacity if achieved, but said that is reliant on not experiencing any shortfalls in the coming months. C1 cash costs this year will be flat or slightly higher, guided at USD4,100 to USD4,200 per tonne.
LogiMan, which conducted the engineering, procurement and construction work for Tschudi, is currently battling Weatherly about the work it provided and the London-listed firm said Friday that arbitration proceedings will "likely arise" to settle the ongoing dispute.
Away from the operations, Weatherly warned that it may not be able to generate enough surplus cash to make loan repayments when they are due if copper prices remain at current levels, but the company is in talks with its lender about the situation.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Weatherly International Plc