Final Results for the Year Ended 30 June 2017

11/12/2017

Weatherly International plc

("Weatherly International" or the "Company")

Final Results for the Year Ended 30 June 2017

Weatherly International Plc (AIM:WTI) announces its final results for the year ended 30 June 2017.

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 / Bhavesh Patel

Broker Contact: Charlie Cryer

Chairman's Statement

The copper price environment in which we operate has improved notably from the previous financial year, with prices subsequent to the end of the current reporting period reaching three year highs. While volatility remains quite high and the outlook uncertain, this is certainly a better position to be operating from than that which the Company has dealt with for some time.

Progress continues to be made at our key operating asset, Tschudi. Management have had to face some operating challenges well beyond those foreseen prior to construction, and production in the year fell below our nameplate target as a result. I am pleased to say that subsequent to the year end our remedial actions are bearing fruit and we remain cautiously optimistic that nameplate production rates will be maintained. 

The Board remains confident in the Company's assets and in its management team. The environment in which we operate remains challenging. Operating safely and optimising the strategic foundation that Tschudi presents, whilst taking all available steps to ensure that production is maintained at the lowest possible cost, remain priorities. The Company continues to look at plans to realise maximum value from our other development assets.

There have been a number of Board changes during the course of the year. We reported on the retirement of both Dr Wolf Martinick, our founding Chairman and Mr Charilaos Stavrakis and our thanks to them both as a post year end event in our last accounts. Following the reduction of Logiman's shareholding in December 2016 to less than 10%, Krzysztof Szymczak resigned as a Director. In June 2017 Rod Webster, our previous CEO, retired from the Board. He had taken the Company from its initial listing and its Zambian copper prospects through to the acquisition, restructuring and development of its Namibian assets. We thank him for his significant efforts over his 12 years at Weatherly and wish him well for the future.

I would like to take this opportunity to thank all our hard working staff for their continued efforts during what has proved to be a challenging year. Our Shareholders have continued to support us through a difficult period and I hope their faith will be rewarded during the next phase of our development. Orion, our largest shareholder and debt provider, have remained behind the Company and extremely supportive during this time. The Company will continue to strive to produce returns for Orion and all our stakeholders. 

John Bryant

Chairman

Chief Executive Officer's Report

Tschudi Operational Review

While our operational safety performance has improved greatly over the last few years, we were disappointed to record our first operational Lost Time Injury (LTI) at Tschudi in October 2016 after reaching 669 consecutive days and more than 3 million hours worked LTI free. The injured employee recovered fully and returned to work after three days of rest and Tschudi has operated without any further LTI's since that time. We remain resolutely committed to preventing injuries in our workplaces through the implementation and continuous improvement of Weatherly's "Safe Copper" model throughout our business.

As in past years we delivered substantial benefits to Namibia via employment, taxation and royalties, skills development, and through maximising mineral resource value-addition by producing pure refined copper metal in country. This year we were able to massively elevate our support for the Namibian government's Harambee Prosperity Plan through donation of land and continuing support for housing some of the most disadvantaged members of the Tsumeb community, as more fully described later in the Safety, Environment and Corporate Social Responsibility section of this report.

In production terms, the year began on the back foot with Tschudi needing to recover from the high groundwater inflow rates encountered in the open pit in the last quarter of the previous year. These inflow rates far exceeded the worst case scenarios foreseen within the Bankable Feasibility Study (BFS), making it impossible to prepare for these excessive inflows in advance and making it equally impossible to provide the required volumes of ore from the pits to the crushing and stacking plant in the short term. As a result, cathode production in the September quarter was 15% below nameplate, as the market had been advised it would be.

The Tschudi operating team acted quickly to address the issues. After first encountering the excessive inflows in May 2016, they had recovered sufficiently that by August the ore volumes delivered from the pit were back to target levels. Leaching rates then recovered by September, and the December quarter production exceeded nameplate by 6%, achieving 4,496 tonnes of cathode stripped in that quarter at a C1 cost of US$4,222 per tonne, aided by deferring some waste stripping from the first half of the year to the second half of the year.

Unfortunately, that production improvement was short-lived. In the March 2017 quarter evidence first emerged that despite precisely following the design parameters prescribed by the BFS for mixed (oxide & sulphide) ore, the speed at which copper was being leached into solution for this ore type was notably slower than had been predicted in the BFS.

Once again the Tschudi team needed to react as quickly as possible. Investigations commenced immediately into ways that heap operating parameters could be changed to speed up the rate of leaching, particularly by modifying conditions to increase the level of bacterial activity within the heap. These investigations and the resulting trials are moderately long term exercises, and it is expected to take until the end of the 2017-18 financial year before any clear conclusions can be drawn. Independent international expertise has been engaged to assist with this work.

When the slow leaching issue first arose, shorter term options available to increase production included accelerating the rate of mining and stacking of ore, and also bringing forward the planned construction of additional heap leach pad area so that slower-leaching ore could be allowed more time to leach prior to sealing it off and then stacking freshly-mined ore on top.

Construction of the additional leach pad area commenced in March and remains on schedule. Seasonal rainfall delayed the short-term acceleration of mining and stacking, with rain delays typically 2 to 3 times higher than those experienced in the preceding two rainy seasons at Tschudi. February delays were particularly acute, and instead of accelerating stacking, stacking volumes in February were actually less than planned. Once those rain delays subsided, mining and stacking rates improved from March onwards, and cathode production rates steadily improved from April onwards, with nameplate production again achieved after year end by the end of the September 2017 quarter.

However the negative impact on production volumes and unit costs in the March and June quarters was significant. When combined with the expected poor first quarter result due to the impact of excessive groundwater inflow, three out of four quarters averaged almost 20% below nameplate production rates, and for the whole year Tschudi produced 14,759 tonnes of cathode, which was 13% below the nameplate target of 17,000 tonnes. The C1 unit cost achieved for the year was $5,288 per tonne.

Project Development Review

In November 2016 the Company provided an update on Project Development progress and plans for Otjihase and Matchless. This update highlighted a low-risk and potentially incrementally cash-generative opportunity to commence with its skills development programme at Otjihase and also announced a co-operation agreement with the holder of the nearby Ongombo development prospect. The Company also reported plans to investigate the potential for the skills development opportunity to support a longer-term strategic goal of achieving 10-12ktpa of contained copper in concentrate from Otjihase and Matchless at C1 costs below US$2/lb.

In December 2016, AIM-listed China Africa Resources plc underwent a substantial restructure, the end result of which is that Weatherly now directly owns 25% of China Africa Resources Namibia Limited, a private Namibian company and holder of the Berg Aukas zinc-lead-vanadium development project in Namibia. Weatherly also now holds 2.6% of LSE-listed Pembridge Resources plc (formerly AIM-listed China Africa Resources plc).

Financial

(a) Revenue, costs and Profitability

After several years of declining copper prices we finally saw some encouraging signs with spot copper prices finishing the financial year at US$5,949 per tonne up from US$4,836 per tonne at the beginning of the year. Since year end we have seen copper reach levels as high as US$6,900 per tonne giving some encouragement for the future. While copper has shown an increase we have seen a weakening of the dollar against the rand which has adversely affected costs in US dollar terms while reducing the impact of the increase in the copper price when converted to rand. Rand started the year at 14.77 to the dollar but strengthened to 13.04 at year end. Hence while revenue increased 23% per tonne due to copper price, costs increased by 13% due to exchange rates.

Revenue for the year after royalties was US$75.1m and was all generated from Tschudi. In the prior year US$6.7m of our income came from Otjihase and Matchless but production ceased in the first quarter of last year while Tschudi only contributed income after achieving Commercial Production from 1 October 2015.

In accordance with IAS 36 "Impairment of assets" the Group was required to perform an impairment review of the assets of Tschudi as at 30 June 2017. For the purpose of this review the Group have assumed leaching recovery will be 80% of total contained copper in mixed and sulphide ore types (the BFS was based on 85%), which has resulted in an impairment of US$9m to the carrying value of the Tschudi property plant and equipment. As an indication of sensitivity if leaching recoveries were 82% no impairment would have been necessary. Further details of the impairment can be found in the property plant and equipment note, note 15.

Tschudi's costs before interest and depreciation and impairments were US$79.6m and as a result it made a loss of US$4.5m before interest, tax and depreciation (EBITDA). As mentioned in the Operational Review section above, cathode production in the first quarter of the year was adversely effected by rates of groundwater inflow significantly higher than those anticipated in the feasibility study. The effect of the reduced production and higher water management costs was to increase production and distribution costs (meeting the definition of C1 costs for the mine) to US$5,073 per tonne for the quarter up from US$4,199 for the previous year. By the second quarter of the year the ground water was brought under control and C1 costs were US$4,222 per tonne, down to levels we had anticipated producing at for the year despite the strengthening of the rand. However in the third quarter our production moved into mixed oxide/sulphide ore and we were affected by significantly slower leach rates than those anticipated in the feasibility study. Once again the effect of the reduced production impacted the C1 cost per tonne which averaged US$5,907 per tonne in the quarter. In the fourth quarter we were able to increase production slightly to 3,386 but only by moving higher volumes of ore and waste and stacking more ore on the leach pads. The result was despite the increased production, C1 costs rose to US$6,344 per tonne for the quarter and the year finished with a C1 cost for the year of US$5,288 per tonne.

Otjihase and Matchless were in care and maintenance throughout the year while we accessed opportunities to resume production in a low risk environment. Total costs amounted to US$1.6m before interest, tax and depreciation. Corporate costs in the UK were reduced from US$1.7m to US$1.1m because of cost cutting measures.

The Group impaired its investment in China Africa Resources plc (now Pembridge Resources plc) by US$1.4m as our share of the company reduced to levels where it was classified as an investment rather than an associated company. Pembridge issued an in-specie dividend of its Namibian subsidiary, China Africa Resources Namibia Ltd prior to the capital raise and as a result Weatherly owns 25% of this company which has been valued based on that advised by the Pembridge Resources plc at the time of the dividend at US$0.1m.

Overall at the EBITDA level Tschudi made a loss of US$4.5m, Otjihase and Matchless costs amounted to US$1.6m, and UK costs to US$1.1m. Depreciation for the year was US$14.9m and an impairment was charged of US$9.0m as discussed above and there was a loss of US$1.3m booked for the overall restructuring of our investment in China Africa Resources plc. This left an operating loss of US$32.4m which increased to US$41.1m tax because of finance costs and foreign exchange gains as the rand strengthened.

(b) Loans and cash

The slower leach rates identified above meant that there was a need to bring forward the construction of our final heap leach pads to provide additional time for the leaching of copper from mixed ore under irrigation. Post year end the Company entered into an uncommitted US$10 million facility with Orion Mine Finance. The key terms of this additional uncommitted facility include inter alia an interest rate of Libor plus 2%, a drawdown period up to 30 June 2018, and a due date of 28 February 2020. The proceeds of the US$10 million facility will be applied to accelerate the building of the leach pads and to fund operating costs and general working capital requirements at Tschudi.

In order to ensure the Group can stay within this facility it has fixed the forward price of copper and exchange rates at rates favourable to those assumed for the US$10 million facility. For the period July to November 4,550 tonnes were fixed at an average price of US$5,962 per tonne. In December 1,000 tonnes were fixed at US$6,077 and from January to May an average of around 1,000 tonnes per month are fixed at US$6,469 per tonne. All these tonnages were also fixed at a US$:N$ exchange rate that averaged between 13.3 and 13.4.

Cash generated by operating activities in the year was US$2.9m although most of this was working capital movements particularly creditors increasing by US$5.6m while inventory at Walvis Bay increased by US$1.7m. Debtors remained at similar levels to the previous year with 8 months VAT outstanding although since year end we are happy to report this has reduced significantly and by the end of August was down to 4 months, although the timing of VAT payments remains largely outside our control.

The Group spent US$6.9m on property plant and equipment, US$2.2m being work in progress on the leach pads, US$1.0m relating to dewatering, US$2.5m the stripping asset and US$1m mobile plant. Offsetting this expenditure the Group received a return of a previously capitalised deposit from Nampower of US$1.5m for the construction of Tschudi power supply infrastructure and after cash for disposal of assets the net expenditure on property plant and equipment was US$5.2m in total. Orion supported the start of the construction of the leach pads with a working capital loan of US$3.6m against the inventory at Walvis Bay.

Overall the group finished the year with free cash of US$6.3m. With working capital requirements and the lack of cash generation at Tschudi, there was insufficient cash to make any repayments of capital or interest on the loans to Orion Mine Finance and they were rescheduled on several occasions. The first repayment under Tranche B, amounting to US$9.7m and those under Tranche C and D amounting to US$10.3m have been deferred by two months on several occasions and are now due on 31 December 2017. Despite the increase in copper prices it will be some time before the company can generate sufficient cash to meet even the first repayments and the Company continues to positively engage with Orion on the subject.

Summary & Conclusion

The year began with relatively-flat copper prices around five year lows and with the Tschudi operation addressing groundwater challenges in order to return to nameplate production levels. The strategic focus for Weatherly was clearly set on stabilising Tschudi at nameplate output and conserving cash, while cautiously preparing for better times ahead.

The first half of the year went to plan. The groundwater issues were dealt with in the September quarter and record Tschudi production was achieved in the December quarter. The Company's prospects were further buoyed by a notable improvement in copper price occurring in the same quarter.

The second half of the financial year did not go to plan at Tschudi, with slow leach rates unforeseen by the BFS impacting upon production and increased seasonal rainfall delays slowing short term mitigation responses.

While a decisive and determined response by operational management ensured Tschudi production levels improved after April, the second half of the financial year was indeed very challenging for the Company as a whole and for Tschudi in particular.

Nevertheless the Company continued to prepare for better times ahead by cautiously advancing project development plans for Otjihase and Matchless, and also seeking further growth opportunities in our region, consistent with our stated strategy of pursuing growth through developing and operating profitable medium-scale base metals mines in lower-risk parts of Africa.

Following the financial year end copper prices have moved higher still. Tschudi returned to nameplate production levels by the end of September and these levels are expected to be maintained.

I would like to thank all of the Company's staff and our contractor partners for their hard work and for their resilience and determination in the face of adversity. Their operational achievements while also maintaining a strong record in terms of safety and environmental performance are to be applauded and form a platform from which to strive for further improvement.

While our loss-making financial results are of course very disappointing, I would also like to take this opportunity to thank all of our shareholders and especially Orion for being so supportive through the period.

In last year's report, I concluded by looking forward to better copper prices ahead, and committing in the meantime to position ourselves to take advantage of the opportunities that are only available to those who adapt well in tough times.

Both things came to pass despite the new challenges faced, and we now look forward to further stabilising and optimising performance at Tschudi and to more robustly advancing our project development portfolio.

Craig Thomas

Chief Executive Officer

Principal Risks and Uncertainties

The Group is exposed to a number of risks and uncertainties which could have a material impact on the performance of the business. The management of these risks is an important part of the day to day responsibility of the management team.

The Board recognises the risks below as the principal risks within the business:

Key Performance Indicators

The Board sets key performance indicators relevant to the stage of operation of the mines and development projects. Safety and adherence to environmental legislation are of paramount concern across all our mines. The Board is conscious that shareholder return is of paramount importance and share price is a key measure for the business.

Safety, Environment and Corporate Social Responsibility

Weatherly is committed to the production of what we call "Safe Copper". Our Vision is to be known by everyone everywhere as "the Safe Copper company" - a team of great people, working according to our Safe Copper values to reliably deliver the Safe Copper results we promise.

While safety of people in our workplaces is always of the utmost importance to us, Safe Copper is about much more than preventing workplace injuries. It is about managing all business risks well and thus reliably delivering benefits to all stakeholders.

Safe Copper is:

Ø Safe for our people - Copper produced without injury

Ø Safe for our environment - Copper produced without environmental harm

Ø Safe for our communities - Copper valued by our community for its positive contribution

Ø Safe for our shareholders - Copper delivering strong and reliable returns for shareholders

Ø Safe for our future - Copper that offers secure long-term employment

We use our Safe Copper values to define the required behaviours in the workplace, which are in turn used to drive delivery of the outcomes we require from the business as a whole. These values and behaviours assist us with management of all risks faced by the business. We fully recognise that positive management of safety, environment and social risks have concrete positive impacts on the performance of the business. We further believe that these same values and behaviours play an important direct role in managing the risks affecting delivery of the operational and commercial results we set out to achieve.

Weatherly's commitment to the production of Safe Copper includes a clear policy statement that we will conduct our business in a manner that protects and promotes the occupational safety and health of our employees and contractors, safeguards the environment as a whole, and improves the overall quality of life at work and in our communities. Our policy position also makes clear that we will ensure responsible stewardship of the natural resources over which we have control or influence, and that we will manage our activities to minimise disturbance to the environment.

In 2013 we committed to improve our safety management system to align with OSHAS18001. In 2014 we expanded this plan to development of an integrated management system aligned with OSHAS18001 for occupational safety and health, and ISO14001 for environmental aspects. In the same year we also developed the Safe Copper model referred to above.

As a result of these measures, over the last few years our safety performance has improved significantly. Lost time injury frequency rates fell by over 90%, and at the end of the 2015-16 financial year Tschudi had achieved over 500 consecutive days and over 2.4 million hours worked without a Lost Time Injury (LTI). Sadly, in the 2016-17 financial year Tschudi experienced its first operational LTI at the end of October 2016, when one of our employees slipped over while bending down to take a sample and strained his back. He recovered fully after resting for three days. By the time of that LTI, Tschudi had recorded over 3 million man hours and 669 days LTI free. From that date until the end of the financial year we suffered no further LTIs and achieved 242 days and 1.3 million hours LTI free.

The Environmental Clearance Certificate (ECC) for Tschudi was renewed for another three years from August 2016 and the ECCs for Otjihase and Matchless were renewed for three years from October 2016. Tschudi Quarterly Environmental Forum meetings continued wherein the results of environmental monitoring are shared publicly with interested stakeholders representing national, regional and local government; the local community; and neighbouring property owners. No reportable environmental incidents occurred and no fines were imposed for environmental non-compliance.

Business Ethics

Consistent with our Safe Copper values, Weatherly is committed to carrying out all its operations with high moral and legal standards. Weatherly has a well developed Anti corruption and Anti bribery policy in line with the Bribery Act. All staff are made aware of their obligations on recruitment and with periodical updates. The company maintains a "whistle blower" programme.

Benefits to Namibia and Corporate Social Responsibility

Weatherly's operations in Namibia benefit the adjacent and wider Namibian community through the creation of substantial direct and indirect employment.

Development of the Tschudi project into a mine which produces pure refined copper on site for the first time on a commercial scale in Namibia is supportive of the Government's stated strategic objectives relating to maximising value-addition by beneficiation of mineral resources entirely within the country.

Further Weatherly's projects benefit Government's development and social objectives via the direct contribution made to Namibia's fiscus via royalties and taxation, and via benefits the Government of the Republic of Namibia will obtain by virtue of its significant shareholding in Weatherly International through the state-owned mining company, Epangelo Mining.

Additional benefits provided by Weatherly in line with Government's stated objectives relate to the significant training and skills creation activities which take place.

Weatherly is committed to supporting government in delivery of the Harambee Prosperity Plan, and in line with that support Weatherly officially donated land valued at N$314 million to the Municipal Council of Tsumeb at the Tsumeb Copper Festival in November 2016. This land is known locally as Kuvukiland and is currently occupied by some of the most disadvantaged members of the Tsumeb community. Weatherly continues to work constructively with the Municipality and with the Shack Dwellers Federation of Namibia to assist with the development of this land for the benefit of those living there. Weatherly has also actively supported skills development activities in the area in the form of sponsorship of the Tsumeb Community Skills Development Centre (COSDEC) career fair and support for practical training sessions at Tschudi for trade apprentices from the Namibian Institute of Mining & Technology (NIMT).

Reserves and Resources Statement

Current Operations- Tschudi

All reserves and resources in tables A and B below have been updated to 30 June 2017 and are reported in accordance with the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code") and estimated by a Competent Person as defined by the JORC Code (as described more fully below).

Table A: Weatherly Mining Namibia, Tschudi Mine: Ore Reserves Estimate as at 30 June 2017

The Ore Reserves have been estimated by depletion and are reported above a copper cut-off grade of 0.3%, and based on a copper price of US$6,600/tonne (US$2.99/lb).

Current surface stockpiled ore has been included in the reserve estimate contributing 0.33Mt of ore at a grade of 0.65% containing 2.15kt Cu metal at the end of June 2017.

The above tables are subject to rounding errors and may not cast.

Competent Persons Statement- Tschudi Ore Reserve Estimate. The information in this report that relates to the Tschudi Ore Reserves Estimate is based on information compiled by Mr Werner K Moeller, BEng (Mining), BEng (Industrial) (Hons), a competent Person who is a Member of the South African Institute of Mining and Metallurgy, which is a Recognised Professional Organisation ("RPO"). Mr Moeleer is a director of Qubeka Mining Consultants CC. Mr Werner has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and ore Reserves'. Mr Moeller consents to the inclusion in the Annual Report of the matters based on his information in the form and context in which it appears.

Table B: Weatherly Mining Namibia, Tschudi Mine: Mineral Resources Estimate as at 30 June 2017

The Mineral Resources have been estimated by depletion and are reported above a copper cut-off grade of 0.3%.

The Measured and Indicated Mineral Resources are inclusive of Ore Reserves.

The above tables are subject to rounding errors and may not cast.

Competent Persons Statement - Tschudi Mineral Resources Estimate. The information in this report that relates to the Tschudi Mineral Resources Estimate is based on information compiled by Mr Michael Stuart, MBA, MSc, BSc(Hons), MIMMM, a Competent Person who is a Professional Member of the Institute of Materials, Mineral and Mining, which is a Recognised Professional Organisation ('RPO'). Mr Stuart is a full-time employee of the Company. Mr Stuart has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Stuart consents to the inclusion in the Annual Report of the matters based on his information in the form and context in which it appears.

Resources and Reserves Statement- Development Projects

All reserves and resources in tables C & D below were updated to 30 June 2014 and are reported, in accordance with the Australasian Code of Reporting Mineral Resources and Ore Reserves (the "JORC Code") and were estimated by a Competent Person as defined in the JORC Code (as described more fully below) They have not been updated to 30 June 2017. However the only activity that occurred on these sites from 1 July 2014 to 15 September 2015 which would affect these figures was mining and processing of ore from Otjihase and Matchless Western Extension. During the period 1st July 2014 to 15 September 2015 the following ore was mined and processed from these projects:

Otjihase: 210kt at 1.53% Cu containing 3,220 tonnes Cu metal.

Matchless (Western Extension): 172kt at 1.90% Cu containing 3,090 tonnes Cu metal.

Table C: Weatherly Mining Namibia, Development Projects: Ore Reserves Estimate as at 30 June 2014

The above tables are subject to rounding errors and may not cast.

Table D: Weatherly Mining Namibia, Development Projects: Mineral Resources Estimate as at 30 June 2014

Reported in accordance with 2004 Edition of the JORC Code.

The Measured and Indicated Mineral Resources are inclusive of Ore Reserves.

The above tables are subject to rounding errors and may not cast.

Competent Persons Statement- Ore Reserves and Mineral Resources The information in this report that relates to the Ore Reserve and Mineral Resource estimates is based on information compiled by Mr Andrew Thomson BSc (Hons) Geology, Country Manager and Technical Director, Weatherly Mining Namibia, member of South Africa Council for Natural Scientific Professions (registered number 400052/86), a Competent Person. Mr Thomson has sufficient experience that is relevant to the styles of mineralisation and type of deposits under consideration and to the activities being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Thomson consents to the inclusion in the Annual Report of the matters based on his information in the form and context in which it appears.

Weatherly Mining Namibia: Historical Estimates

The estimates in Table E are "historic estimates" and although most were prepared at the time in accordance with South African reporting standards (SAMREC) they are not reported in accordance with the current JORC code of 2012. At this stage no competent person has done sufficient work to report these "Historic estimates" in accordance with the JORC code (2012). It is uncertain that following evaluation and/or further exploration that the "historic estimates" will be able to be reported as mineral resources in accordance with JORC Code (2012).

Table E: Weatherly Mining Namibia: Historical Resources Estimate

* Remaining resource/reserve calculated by Tsumeb Corporation Limited in 1984.

The above tables are subject to rounding errors and may not cast.

The Strategic Report on pages 2 to 14 was approved by the Board of Directors on 8 December 2017 and was signed on its behalf by Craig Thomas, Chief Executive Officer.

Craig Thomas

Chief Executive Officer

Corporate Governance Report

Introduction

Whilst we do not comply with the UK Corporate Governance Code ("the Code"), the Board of Directors is committed to maintaining high standards of corporate governance.

The Board is accountable to its shareholders for good governance, and the statement below is based on the review of corporate governance that was carried out by the Audit Committee and describes how the principles of good governance have been applied.

Constitution of the Board

During the year ended 30 June 2017, the Board was comprised of the following:

John Bryant Non-executive Chairman

Craig Thomas Chief Executive Officer

Alan Stephens Senior Independent Non-executive Director

Edwin Bennett Non-executive Director

Rod Webster Non-executive Director (Resigned 30 June 2017)

Wolf Martinick Non-executive Director (Resigned 22 July 2016)

Charilaos Stavrakis Non-executive Director (Resigned 22 July 2016)

Krzysztof Szymczak Non- executive Director (Resigned 7 December 2016)

Non-executive Directors

During the year, the Board had seven non-executive directors: John Bryant (Non-executive Chairman), Alan Stephens, (Senior Independent Non-executive Director), Wolf Martinick, Rod Webster, Charilaos Stavrakis, Krzysztof Szymczak and Edwin Bennett. Alan Stephens, John Bryant and Charilaos Stavrakis were considered to be independent. They have a relatively small number of shares and share options that does not, in the opinion of Weatherly's advisers or its directors, impair their independence. Due to the size of Wolf Martinick's and Rod Webster's historic shareholding they were not considered to be independent directors. Edwin Bennett is employed by Orion Mine Finance which owns 24.6% of Weatherly so he is not considered to be independent. Krzysztof Szymczak was a director of Logiman (pty) Ltd which owned more than 10% of Weatherly during his directorship and he is also not considered independent.

Committees of the Board

The Board has four Standing Committees, each of which has terms of reference setting out its authority and duties, as follows:

The Audit Committee was made up of John Bryant and Alan Stephens throughout the year. Edwin Bennett was appointed to the Committee when Charilaos Stavrakis resigned on 22 July and John Bryant took over as Chairman from that date.

The Audit Committee meets as required. It reviews the financial reports and accounts and the preliminary and interim statements, including the Board's statement on internal financial control in the annual report, prior to their submission to the Board for approval. The Audit Committee also reviews corporate governance within the Group and reports on this to the Board. In addition, it assesses the overall performance of the external auditor including scope, cost-effectiveness and objectivity of the audit.

The Audit Committee is also charged with reviewing the independence of the external auditor and monitors the level of non-audit fees. These fees are disclosed in note 9 to the accounts. In the opinion of the Audit Committee, which has reviewed these fees and the procedures that Grant Thornton UK LLP have in place to ensure they retain their independence, the auditor's independence is not compromised.

The Audit Committee can meet for private discussion with the external auditor, who attends these meetings as required. The Company Secretary acts as secretary to the Committee.

The Remuneration Committee Alan Stephens as Chairman and John Bryant served on the Committee throughout the year. Charilaos Stavrakis and Krzysztof Szymczak were members of the committee until they resigned from the Board on 22 July 2016 and 7 December 2016 respectively. Rod Webster was appointed to the committee on 22 July 2016 and served until he resigned from the Board on 30 June 2017.

The Remuneration Committee determines, on behalf of the Board, the Group's policy on executive remuneration and the remuneration packages for executive directors. It also approves and administers the executive share option scheme and the grant of options as part of the remuneration package.

Nominations Committee

John Bryant (Chairman), Craig Thomas and Edwin Bennett served throughout the year.

In addition to its role of considering the appointment of directors and senior managers, the Nominations Committee is also charged with reporting to the Board on the effectiveness of the Board, its sub-committees and its directors, and it does this at the end of the annual audit cycle.

Disclosure Committee

John Bryant (Chairman), Alan Stephens, Edwin Bennett and Craig Thomas served throughout the year.

The Committee deals with the requirements of the Market Abuse Regulations which were brought into effect on 4 July 2016. The main activity of the Committee is to ensure the Company are making correct and timely disclosure with regard to both the London Stock Exchange rules as applied to AIM and the Market Abuse Regulations.

Attendance at Meetings

During the year, there were fifteen Board meetings. Directors' attendance at meetings of the Board and its sub-committees during the period was as follows:

John Bryant Board 14/15 Audit Committee 2/2 Nominations Committee 1/1

Craig Thomas Board 15/15 Nominations Committee 1/1

Rod Webster Board 13/15

Alan Stephens Board 9/15 Audit Committee 2/2 Nominations Committee 1/1

Edwin Bennett Board 14/15 Audit Committee 2/2

Wolf Martinick, Charilaos Stavrakis and Krzysztof Szymczak did not attend any Board meetings

Of the fifteen Board meetings, three were of a procedural nature and twelve were substantive meetings.

The Remuneration and Disclosure Committees did not meet in the year.

The Board is responsible for reviewing and approving the adequacy and effectiveness of the Group's internal controls, including financial and operational control, risk management and compliance.

In order to establish effective procedures for internal control and communicate these throughout the Group, including its subsidiaries, the Board has issued two important documents to staff known as the Board Protocol and the Accounting Procedures Manual.

The key elements of the Group's internal control are set out in these documents, and contain:

· a clearly defined structure for the Group, its subsidiaries and management teams;

· powers which the Board has reserved to itself. These include the approval of all business plans and budgets for the Group and all its subsidiaries, the establishment of subsidiary companies and appointment of directors to them, and the process for project approval and capital expenditure;

· terms of reference for the Audit, Remuneration and Nominations Committees, which define the roles of their members;

· information about how often the Board should meet (as a minimum) and an annual cycle of meetings. This covers the process for the preparation of Board agendas and Board papers, and their prior consideration by the management team at its weekly meetings;

· detailed business plans and budgets to be approved annually and performance monitored by the management team and the Board at its monthly meetings; and

· procedures for the approval of expenditure, the levels of authority and the management controls.

The directors acknowledge their responsibility for the Group's system of internal financial control and risk management, and place considerable importance on maintaining this. The Accounting Procedures Manual and the process for authorisation that it imposes, together with the Board Protocol setting out the process for authorising business plans, budgets and projects, form an important part of our decision-making process; however, this can only provide reasonable and not absolute assurance against material errors, losses or fraud.

There is currently no internal audit function within the Group owing to the small size of the administrative function. There is however a high level of review by directors and a clear requirement for them to authorise transactions. Should the need for a separate internal audit function become apparent, the Board will establish one.

The Board Protocol and the Accounting Procedures Manual have both been updated and refined as Weatherly's business evolves and grows.

Bribery Act Compliance

In response to the introduction of the Bribery Act 2010 and in order to ensure compliance, the Board approved a suite of documentation that included a policy statement on anti-corruption and bribery, a code of conduct for employees, a set of management procedures, a note defining responsibilities within the Company and an implementation plan which has been rolled out in the Company. Progress on the implementation has been reported to the Audit Committee. The Audit Committee noted that documentation has been circulated and meetings to explain the procedures have been held with all staff and contractors on site including our operating mines in Namibia. Notices have been displayed at our locations with the "whistle-blowing" procedure. The implementation and effectiveness of these procedures is continually monitored and reported to the Board. We reaffirmed compliance with the Bribery Act with senior management team in Namibia during the year.

Relations with Shareholders

The Company endeavours to maintain regular communications with shareholders through regulatory announcements, via the Weatherly International website and by direct contact with its major shareholders. The Board values the views of its shareholders and fosters continuing dialogue with investment and fund managers, other investors and equity analysts to ensure that the investing community receives an informed view of the Group's prospects, plans and progress.

Directors' Remuneration Report

Remuneration Committee

The Company has established a Remuneration Committee which is constituted in accordance with the recommendations of the UK Corporate Governance Code (September 2014). The members of the Committee for the year ended 30 June 2017 were Alan Stephens and John Bryant. Charilaos Stavrakis and Krzysztof Szymczak were members until they resigned on 22 July 2016 and 7 December 2016 respectively. Rod Webster was appointed to the committee on 22 July 2016 until he resigned on 30 June 2017. All except Krzysztof Szymczak and Rod Webster are independent non-executive directors, and the Committee was chaired by Alan Stephens.

The Committee makes recommendations to the Board. No director plays a part in any discussion about his own remuneration.

Remuneration Policy for the Executive Directors

Executive remuneration packages are designed to attract, motivate and retain directors of the highest calibre to lead the Company and to reward them for enhancing value to shareholders. The performance management of the executive directors and key members of senior management, and the determination of their annual remuneration package, are undertaken by the Committee.

There are five main elements of the remuneration package for executive directors and senior management:

· basic annual salary;

· benefits in kind;

· annual bonus payments;

· share option incentives;

· pension arrangements.

The Company's policy is that a substantial proportion of the remuneration of the executive directors should be performance related. Executive directors may earn an annual bonus payment together with the benefits of participation in share option schemes.

Basic Salary

An executive director's basic salary is reviewed by the Committee prior to the beginning of each year and when an individual changes position or responsibility. In deciding appropriate levels, the Committee considers the Group as a whole and relies on objective research which gives up-to-date information on a comparable group of companies. In considering the Chief Executive's basic salary, the Remuneration Committee took into account his extensive responsibilities.

Benefits in Kind

No benefits in kind were payable to directors in the current year.

Annual Bonus Payments

The Committee establishes the objectives that must be met for each financial year if a cash bonus is to be paid. In setting appropriate bonus parameters, the Committee refers to the objective research on a comparator group of companies, as noted above. The Committee believes that any compensation awarded should be tied to the interests of the Company's shareholders and that the principal measure of those interests is total shareholder return. Account is also taken of the relative success of the different parts of the business for which the executive directors are responsible and the extent to which the strategic objectives set by the Board are being met. The maximum performance-related bonus that can be achieved is 100% of basic annual salary. The strategic objectives, control system and indicators are also aligned to total shareholder return.

Share Options

The Company has issued share options to its staff under an unapproved share option scheme. The Remuneration Committee has responsibility for the administration of the scheme and the granting of options under its terms. This includes setting the performance criteria when appropriate and the strike price of the options. The details of these awards are set out below and their accounting treatment is dealt with in note 29 to the financial statements.

Directors' Contracts

All the directors have signed contracts with the Company. Craig Thomas' appointment does not have a fixed term but is subject to 6 months' notice by the Company. The non-executive directors are appointed for a fixed term: John Bryant for two years, and other Director's for three years. These may be terminated by giving two months' notice, without compensation for loss of office. All newly appointed directors are required to offer themselves for election at the next Annual General Meeting of the Company and their appointments are subject to them being so elected. Non-executive remuneration is determined by the Board within the limits set by the Articles of Association and is based on independent salary surveys of fees paid to non-executive directors of similar companies. The basic salary paid to each non-executive director in the year was £30,000. The non-executive directors receive further fees for additional work performed for the Company on the basis of the number of additional days worked.

Aggregate Directors' Remuneration

The total amounts for directors' remuneration, paid by Weatherly International plc and its subsidiaries, were as follows:

E W Bennett and K Szymczak received no remuneration for their directorships.

Directors' Share Options

Aggregate directors' remuneration disclosed above does not include any amounts for the value of options to acquire ordinary shares in the Company granted to or held by the directors. Details of the total number of options granted to date are set out below.

All options are fully vested except 933,333 of Craig Thomas' 3.38p options which vest on 13 October 2017. The options of the directors who have retired expire 12 months after their retirement date being 12 July 2017 for C Stavrakis and W Martinick and 30 June 2018 for R Webster.

The share price movements during the year were as follows: high of 1.05 pence, low of 0.25 pence and a closing share price at 30 June 2017 of 0.33 pence.

There have been no variations to the terms and conditions or performance criteria for directors' share options during the financial year.

Approval

This report was approved by the Board of Directors on 8 December 2017 and signed on its behalf by:

John Bryant

Chairman

Statement of Directors' Responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have prepared financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm that:

· so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware; and

· the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Auditor

Grant Thornton UK LLP have expressed their willingness to continue in office as auditor, and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.

On behalf of the Board:

John Bryant

Chairman

8 December 2017

Directors' Report

Principal Activities

The principal activity of Weatherly International plc during the year was to act as a holding company for the Group's activities in mining and production of base metals, primarily copper.

The subsidiary and associated undertakings principally affecting the profits or net assets of the Group in the year are listed in note 16.

Review of the Business and Future Developments

The review of the business and future developments of the group are included within the Chief Executive Officer's Review on page 3.

Financial Risk management has been assessed within note 31.

The Directors

The directors during the year ended 30 June 2017 were:

J Bryant (Non-executive Chairman)

C R Thomas (Chief Executive Officer)

A J Stephens (Senior Independent Non-executive)

E W Bennett (Non- executive)

R J Webster (Non-executive) (Resigned 30 June 2017)

W G Martinick (Non-executive) (Resigned 22 July 2016)

C G Stavrakis (Non-executive) (Resigned 22 July 2016)

K Szymczak (Non-executive) (Resigned 7 December 2016)

Directors' indemnities

Weatherly International plc maintains liability insurance for its directors and officers during the year and also as at the date of the report of the directors. This group cover extends to and includes the directors and officers of the company.

Going Concern

The Group incurred a loss before tax of US$41.1m during the year ended 30 June 2017 and, at that date, had net current liabilities of US$112.8m. Orion Mine Finance (Master) Fund I LP ("Orion"), Weatherly's largest shareholder and lender, have confirmed it has agreed to defer the repayments on Tranche B, C and D of its loan until 31 December 2017. The first payment of Tranche B was originally due on 30 November 2015 with payments due quarterly thereafter. Tranche C was repayable on 31 August 2016 and Tranche D on 9 November 2016. Over US$20m of repayments are due by 31 December 2017 and it is unlikely that the Group will generate sufficient surplus cash to meet the revised loan repayments schedule and the Group's and parent company's ability to continue as a going concern will be dependent on Orion's continued support, of which there is no certainty.

The directors believe that with the support of Orion to defer loan repayments, Tschudi can generate sufficient surplus funds for the Group and parent company to remain as a going concern. However there are a number of uncertainties around the assumptions that have a potentially negative impact on the Group's ability to deliver the forecast cash flows.

These are:

· That Tschudi is able to maintain nameplate production levels of 1,400t of copper cathode a month throughout the period. The risks of not achieving this revolve around not being able to mine and process sufficient ore tonnes to achieve this output as well as the leach time and metallurgical recovery rates remaining in line with the bankable feasibility study (BFS) as we mine into different types of ore.

· The Group has experienced open pit groundwater inflows higher than the BFS which continue to increase as pit mining proceeds to deeper elevations. The flow rates are being managed adequately to ensure a reliable supply of ore for stacking but at deeper or different areas of the mine production could be disrupted.

· The Company has experienced lower leach rates than were anticipated in the BFS and has compensated for this by exposing ore faster in the pit and stacking higher volumes of copper metal in ore, which together result in a higher C1 cost in the short to medium term. The Company continues to extend the heap leach pad area to provide additional time for the leaching of copper. Investigations continue into how leach rates can be improved under modified operating conditions and the subsequent effect on ultimate recoveries with the assistance of the independent consultants. However, it is expected to take to the end of the financial year before any firm conclusions can be drawn.

· Copper price fluctuations not having a further material adverse effect on the Group's profitability.

· As the Group's revenue streams are converted from US dollars to Namibia dollars exchange rate fluctuations could have a material adverse effect on the Group's profitability.

· The timing of income is uncertain. Sales are dependent on the date our customer, Orion, ships the copper cathode.

· The Group recovers VAT receipts in Namibia, the timing of repayment are outside the Group's control.

The ongoing need for Orion's support along with the above conditions indicate the existence of a material uncertainty which casts significant doubt about the Group's and parent company's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. The Group continues to positively engage with Orion on the subject as evidenced by the subsequent events below. The Group and parent company financial statements do not include the adjustments that would result if the Group and parent company were unable to continue as a going concern.

Results and Dividends

The consolidated loss for the year after taxation was US$40,069,000 (2016 loss US$ 10,612,000). No dividends were declared or paid during the year (2016: US$ nil).

Substantial Holdings

Shareholdings of 3% and more of the issued share capital of the Company were extracted from the shareholders' register at close of business on 25 November 2017 as follows:

Major Shareholders' Information

Source: Link Asset Services

Logiman have not informed the Company that they have passed through the 9% threshold.

Events Subsequent to Statement of Financial Position Date

On 28th July 2017 the company announced an additional uncommitted US$10m facility from Orion Mine Finance. The key terms of this additional uncommitted facility are an interest rate of Libor plus 2%, a drawdown period up to 30 June 2018, and a due date of 28 February 2020.

The proceeds of the US$10 million facility will be applied to accelerate the building of the leach pads and fund operating costs and general working capital requirements at Tschudi.

On 30 August 2017 and again on 31 October 2017 Weatherly entered into further amendments to its existing facility with Orion (the "Amendment and Restatement Agreement"). The first repayment of Facility B, is now due on 31 December 2017 and the second on 31 January 2018. Subsequent payments are payable quarterly from 28 February 2018 until 28 February 2020.The Facility B Final Maturity Date remains at 28 February 2020. Each Facility B repayment will remain unchanged so that Facility B will be repayable in 11 equal repayments. Interest up until 31 August 2017 on all tranches has been added to the principal amount but after that date will accrue and be payable on the date of repayment of the corresponding principal amount or, at Orion's discretion, at the end of the three-month interest period then current. Unpaid interest will accrue at a default rate of libor + 12% on tranche B and libor+14% on Tranche C and D (with libor a minimum of 2%). Orion has agreed, effective until 31 December 2017, to limit its acceleration and enforcement rights on the terms set out in the Amended Facility.

The Group entered into copper price and foreign exchange arrangements subsequent to year end that fixed 450t of concentrate delivery for September to December at US$6,170. The exchange rate of 1,000t of concentrate for the same period has been fixed at an average exchange rate of US$:N$13.38. From January to May an average of around 1,000 tonnes per month was fixed at US$6,469 per tonne. These tonnages were fixed at various exchange rates that each month averaged between US$:N$ 13.3 and 13.4.

Exchange Rates

The following rates have been used in the compilation of the financial statements and notes supporting the accounts:

The use of average rates to translate foreign trading is considered appropriate as the revenue and expenditure is relatively stable.

The directors' report was approved by the board and signed on its behalf.

John Bryant

Chairman

8 December 2017

Independent Auditor's report to the Members of Weatherly International Plc

Opinion

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Who we are reporting to

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Material uncertainty related to going concern

We draw attention to note 3 in the financial statements, which indicates that the group and parent company incurred a net loss of $41.1 million during the year ended 30 June 2017 and, as of that date, the group and parent company's current liabilities exceeded its current assets by $112.1 million. As stated in note 3, these events or conditions, along with the other matters as set forth in note 3, indicate that a material uncertainty exists that may cast significant doubt on the group and parent company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those that had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the parent company financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature, timing and extent of our audit work and in evaluating the results of that work.

Materiality was determined as follows:

An overview of the scope of our audit

Our audit approach was a risk-based approach founded on a thorough understanding of the group's business, its environment and risk profile and in particular included:

· evaluation by the group audit team of identified components to assess the significance of that component and to determine the planned audit response based on a measure of materiality. As the Namibian subsidiary (Ongopolo Mining Limited) account for 100% of the group's revenue and 97.6% of loss before tax, a comprehensive approach was determined to be necessary for this entity. There are six intermediate holding companies that make up less than 1% of the total group's assets or losses, and an analytical approach was followed for those entities;

· a comprehensive audit was performed over the parent entity, which makes up 2.3% of the total loss; and

· the audit of the subsidiary was undertaken by a component auditor. We performed a risk assessment and sent group instructions to the component auditor and performed a review of their audit procedures. Planning and concluding communications took place between the group auditors and component auditors. The group audit team visits the mine on a bi-annual basis and the last site visit was undertaken in the prior year audit.;

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report set out on pages 2 to 24, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report under the Companies Act 2006

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the statement of directors' responsibilities .

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

· the parent company financial statements are not in agreement with the accounting records and returns; or

· certain disclosures of directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit.

Responsibilities of directors for the financial statements

As explained more fully in the directors' responsibilities statement set out on page 21 the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Christopher Smith

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

8 December 2017

Consolidated Income Statement

For the year ended 30 June 2017

Consolidated Statement of Comprehensive Income

At 30 June 2017

Consolidated and Company Statement of Financial Position

The loss for the year dealt with in the accounts of the Parent Company, Weatherly International plc, was US$45,619,000 (2016: loss of US$56,965,000)

On behalf of the Board:

C Thomas

Chief Executive Officer

Approved by the Board on 8 December 2017

Company registration no. 03954224

Consolidated Statement of Changes in Equity

For the year ended 30 June 2017

Company Statement of Changes in Equity

For the year ended 30 June 2017

Consolidated and Company Cash Flow Statement