BFS and Loan

19/12/2012

Weatherly International plc

("Weatherly" or the "Company")

Feasibility Results and Funding for Tschudi Copper Project

The Company (AIM:WTI) is pleased to announce the completion of its Bankable Feasibility Study ("BFS") over the Tschudi Copper Project ("Tschudi" or the "Project"), and the signing of a term sheet providing 100% debt funding of the Project. 

Highlights

·; BFS over the Tschudi Copper Project completed.

·; An after tax Net Present Value ("NPV") (8% real rates) of US$105m and an internal rate of return ("IRR") of 32% based on consensus copper prices and exchange rates.

·; An NPV (8% real rates) of US$238 and an IRR of 51% based on December 2012 copper prices and exchange rates.

·; US$88m term sheet signed with RK Mine Finance for 100% debt funding of the Project1.

·; Project Life of Mine (C1) cash costs of US$4,267 /t Cu (US$1.94/lb), below the previously announced estimate of US$4,380/t Cu (US$1.98/lb)

·; Initial capital cost estimate of US$81m.

·; Production expected to commence in 2014.

Rod Webster (CEO) commented:

"I am pleased to say that the hard work from our team in London and Namibia on the optimisation of the Project has resulted in an exceptional outcome, which has made it possible to finance the Project on attractive terms with a quality institution. This is a significant milestone in the development of Tschudi project and the future growth for the Company."

Bankable Feasibility Study

The Company has completed the BFS establishing the main parameters of the Project including capital and operating costs. An independent economic assessment shows Tschudi to be a robust project. 

The initial capital required to develop the Project is estimated at $N693m (US$81m) at an exchange rate of $N8.65/US$, based on contract mining and crushing. Capital and operating costs generated by the BFS were evaluated by Minxcon, an independent financial consultant, who considered two cases. The first was a Consensus Case using industry consensus forecasts as follows:

2 The Namibian Dollar retains parity with the ZAR (RAND)

The second case, the Alternative Case, used prices and exchange rates as at December 2012, namely US$7, 738/t Cu and ZAR/US$=8.65.

The Consensus Case after tax NPV (8% real rate) for the Project was $N915m (US$105m) and the Alternative Case using current prices had an NPV (8% real rate) of $N2,055m (US$238m). The overall conclusions reached by Minxcon were that:

·; "Despite a relatively conservative outlook on the consensus copper price, the Project [under the Consensus Case] still showed an IRR of 32.1%...", and

·; "Under the current currency and copper prices [the Alternative Case] the Project is very robust with an IRR of 50.8%..."

The key elements of the Feasibility Study are:

Production

Mine type Open pit

Resources 50.1mt at 0.86% Cu

Reserve 22.7mt at 0.95% Cu

Mining rate ~17mt/yr

Mine life 11 years

Stripping ratio 7.45/1

Processing method Solvent Extraction, Electro-Winning (SX-EW)

Processing rate 2.0-2.6mt/yr ore

Recovered copper 184,275t

Annual production ~17,000t/yr

Financial

Initial capital $N693m (US$81m)

Life of mine capital $N941m (US$109m)

Life of min cash cost (C1) US$4,267/t Cu (US$1.94/lb)

After tax NPV (8%) - Consensus Case $N915m (US$105m)

After tax IRR - Consensus Case 32.1%

Payback from start of production 2.43 yrs

After tax NPV (8%) - Alternative Case $N2,055m (US$238m)

After Tax IRR - Alternative Case 50.8%

Payback from start of production 1.98 yrs

Project Financing

Weatherly has signed a term sheet with resource fund, RK Mine Finance ("RK"), to provide the total funding for the development of the project. RK has agreed to provide US$88m comprising a secured loan of US$80 million with a cost overrun facility of a further US$8 million (together, the "Loan"). The Loan is subject to due diligence, which will commence in January 2013, and the execution of the final loan documentation which is anticipated in Q1 2013. The key elements of the RK Loan are as follows:

Loan amount US$80m

Interest rate Libor+6%

Overrun facility US$8m

Interest rate Libor + 8%

Duration of loan 6 years (repayments last 4 years)

In addition to the Loan, RK will purchase, on an exclusive basis, 100% of the Project's copper cathode production based on LME/Comex market prices.

1 Financing subject to due diligence

Tschudi Feasibility Study Contributors

The Tschudi feasibility was prepared from contributions by a number of consulting companies, specialists in their fields, under the management of Weatherly. The principal contributors are listed below:

Mining

The Tschudi mine is located 20km west of the mining town of Tsumeb. The orebody is approximately 2km in strike, 10-20m thick and dips at a relatively shallow angle of 30 degrees. Pit optimisation work based on a copper price of US$7,500/t determined a pit bottom at approximately 200m below surface. The deposit, as currently defined, is wholly contained within the granted mining licence (ML125) with possible additional mineralisation along strike contained within the granted exploration licence (EPL132A), which is also owned by the Company.

The Project has an existing environmental certificate (granted in 2003), but this will have to be renewed and updated in keeping with the requirements of the certificate relating to the SX-EW process. The amendments will be submitted for approval by February 2013 at the latest.

The mine starts out as four separate pits but quickly consolidates in year 2 to form one large pit and a small satellite pit. The current reserve is 22.7mt grading 0.95% Cu. The mine is scheduled to remove on average 17 million tonnes of material per year to produce ~ 2 million tonnes of ore for processing - a life of mine stripping ratio of 7.45:1.

Mining will be operated on a contract basis and a letter of intent has been sent to the contracting group, Basil Read, who submitted the selected bid in the recent tendering process. The contract with Basil Read is expected to be completed in 2013 and mining at Tschudi is expected to commence in 2014.

Processing

The Tschudi mineralisation is a mix of oxide and sulphide minerals hosted in sandstone. The dominant copper bearing minerals are malachite, azurite, chalcocite, covellite and bornite. Each of these minerals is amenable to acid leaching with overall metal recovery expected to be 90-95% of soluble copper.

Processing of the ore consists of crushing, agglomeration, stacking, heap leaching, solvent extraction and electro-winning to produce copper cathode. Ore is fed to a three stage crushing plant which reduces the oxide ore to P80

Acid consumption is estimated as ~40,000tpa while the oxides are being processed (first two years) after which consumption drops to ~ 20,000tpa as the sulphide content in the heap increases. Acid is expected to be sourced from the nearby Tsumeb smelter.

The Project will produce ~ 17,000 tonnes of LME grade refined copper cathode per year. The cathode will be trucked to the rail siding at Tsumeb and then railed to the deep water port of Walvis Bay.

Power for the Project will be supplied from the national grid with the existing substation (adjacent to the minesite) being upgraded to provide the 8MWp/a required by the project. Water is available locally from a number of bores located in the dolomitic footwall of the orebody.

The Project is expected to employ approximately 800 people in the construction stage and 500 people in the operating stage. Except for the construction stage, all accommodation will be based in Tsumeb which is well developed with respect to services and amenities.

Project development

The final preparation and submission of the revised Environmental Assessment/Environmental Management Policy and is expected to be completed by the end of January 2013. It is planned to get as much front end engineering as possible underway during the first quarter of 2013 while the funding due diligence is underway and the final environmental clearance is going through the governmental approval process. The study assumes, subject to completion of the financing arrangements and environmental clearance, the Project will be underway by Q2 2013 with production by Q3 2014.

About Weatherly

 Weatherly is an AIM listed, copper focused mining company, the principal assets of which are located in Namibia. It currently has two producing copper mines (Otjihase and Matchless), and has recently finalised a feasibility study on the Tschudi project. These projects will enable Weatherly to achieve its medium term strategy of establishing a copper mining business capable of sustaining approximately 20,000tpa of copper at an average industry cost of production.

The Company also has a 25% stake in an AIM listed company, China Africa Resources Plc (CAF), which is currently focused on the development of the lead/zinc project at Berg Aukas in Northern Namibia.

For further information please contact:

Weatherly International Plc +44 (0) 20 7917 2989

Rod Webster, Chief Executive Officer

Dean Friday, Investor Relations

Canaccord Genuity Limited +44 (0) 20 7523 8000

Andrew Chubb, Sebastian Jones

Competent Persons Statement

 The technical information in this announcement has been compiled from the contributions of the independent consultants listed in the table detailed above. These consultants have sufficient experience which is relevant to the style of mineralisation, type of deposit under consideration, and to the activity which they are undertaking, to qualify as a Competent People and have consented to the inclusion of the information in the form and context in which it appears herein.